A Czech court prolonged the protection from bankruptcy of Liberty Steel’s mill in Ostrava on February 28, dismissing petitions by creditors for it to be lifted, Czech news agency CTK reported.

The regional court in Ostrava ruled that Czechia’s largest steel mill, formerly known as Nova Hut, had developed a sufficiently worked out restructuring plan.

The company wants to present it to creditors next week, which they will vote on sometime in April. Some 75% of creditors have to approve the plan.

Liberty Steel owner Sanjeev Gupta appeared at the court in the morning to witness the closed hearing.

"First of all, it was not fulfilled that false information was given in the proposal for a general moratorium, and at the same time it is true that the court did not even find that the entrepreneur pursued a dishonest intention with his general moratorium or overall preventive restructuring," said Judge Viktor Břeska.

A Liberty Steel Group spokesperson said: “The court’s decision to maintain the general moratorium shows faith in our plans which provides the best route to keep the business solvent, restart operations, retain thousands of jobs, and tens of thousands in the supply chain.  It is also the only plan that will repay all undisputed creditors. Last week we provided Tameh with a solution to resolve the impasse on energy supply and we are restarting our downstream operations through the supply of slab feedstock which will lead to around 1,500 people returning to work."

Liberty Ostrava has not been operating since December after its main energy supplier, Tameh, cut off power and went into bankruptcy. Tampeh says it is owed CZK1.8bn by Liberty Ostrava and had petitioned to have the mill’s protection from bankruptcy lifted.

Liberty Ostrava says that “soaring energy costs when combined with other input cost rises and high inflation mean that it is almost impossible for it to produce steel at a price which allows it to compete effectively with foreign competitors”.

The plant’s 6,000 workers, who have been at home on full pay since before Christmas, have held protests against the halt in production. Unions say up to 30,000 jobs in total are dependent on the plant in what is one of Czechia’s poorest regions.

The Czech government has also publicly complained about being kept in the dark by Liberty Steel, which is headquarted in the UK.

The moratorium against bankruptcy claims, which began in November, is due to end on March 21 but there is a possibility for an extension. "However, stricter conditions must be met for an extension," the judge said.