2023-09-10 07:59:58
BarcelonaAfter a very hard fight between the brothers, the time came for the signing of the separation agreement that would end the war. They both signed. It was the moment to seal the family reconciliation. But when Francisco extended his hand to his brother, everything went up in the air. José María did not press him: he took out of his pocket a copy of the complaint that the other had presented against him, and everything was over. The scene marks one of the key moments of the great defeat of the Rubiraltas. That hand suspended in the air, those stapled documents, marked the beginning of the end.
This is the story of the Rubiraltas, a powerful lineage in the country, one of whose branches has experienced this week in court a cataclysm worse than the collapse of the business: the loss of ownership of the most important family business in Catalonia.
“There are no precedents, at least not this big,” the lawyer and historian of the Catalan economy Francesc Cabana tells ARA. The reading of one of the top specialists on the Catalan productive fabric, at the age of 88, is structural: “Catalonia can feed small and medium-sized companies, but it can hardly grow a large company. Too much money is needed to move forward.”
“There are no precedents, at least not this big,” says economic historian Francesc Cabana
The truth is that the story of Celsa, born in 1967, is that of a Catalan family company that sought to grow with the firm will not to transfer ownership. But an excess of business ambition or a lack of prudence soared its liabilities to worrying limits. Decades later, this accounting obligation has ended up taking the entire company in its wake, overnight.
The decision taken this Monday by the commercial court 2 of Barcelona is the end of a series that has lasted for years and that intensified with the presentation of a restructuring plan for creditor funds that accumulated a liability of close to 3,000 million euros. The magistrate in the case decided to approve it and, therefore, transfer ownership of the company to them, considering that they had a debt greater than the steel company’s capitalization.
At the beginning of the 2000s, two brothers, Francisco and José María Rubiralta, were owners and administrators of two holdings: one was Barna Steel and Compañía Española de Laminación (Celsa) and the other was CH Werfen; in practice, Francisco managed the steel part, while José María took care of the second, dedicated to the distribution of hospital material.
“They had been working like this for decades, with shared ownership. Each was dedicated to one of the businesses and they had a very good relationship,” a source close to the company tells ARA who remembers that they summered together in Viladrau. Francisco and José María had their respective sons as managers: the current president of Celsa, Francisc son, was a young talent who gained weight in the steel company.
With the entry of this generation, tensions and differences emerged between the two branches, and a certain rivalry between cousins. The conflict erupted with a business move led by Francisc son: the purchase of the Finnish group Fundia, which he carried out without the green light of José María. “It is what started the break between the brothers,” explains the same source. “That triggered everything,” confirms another voice close to the family.
In 2006, the break between the brothers was confirmed, and the Celsa branch had to compensate the Werfen branch, which was much smaller, with hundreds of millions of euros
In 2006, the separation was consummated, with a legal battle between the two branches that ended with a business separation and a compensation of hundreds of millions of euros. The news was announced on a Saturday in July in the paper version of four miscounted media. The same ones who the day before had received a phone call from Miquel Roca announcing the divorce: each one kept the business they managed, and since the steel company was much bigger than the medical one – it billed 2,800 million euros, and the other 622 million – the Celsa branch had to compensate the other.
“Francisco’s premature death [l’any 2010], who was very young, and at a delicate moment for the company due to debt and crisis, left his very young son in charge; he has been brave, the son”, explains a business source about the beginnings of that generational change. The current president of Celsa replaced his father in 2010, two years after the real estate crisis collapsed the construction sector and complicated the situation debt of the company To add drama to the situation, José María would also die two years later.
This high liability came from an aggressive period of acquisitions, which followed a period of growth, during the decades of the 1980s and 1990s. they could be bought for very little money because they did not work well and some were even bought for a peseta,” a person close to those operations explains to the ARA.
Later would come the wave of acquisitions abroad, which would end up shaping the giant that Celsa is now, with large subsidiaries in the United Kingdom, France, Poland and the Nordic countries. A source familiar with that process points out that some of these investments, such as the 2003 purchase of Polish steelmaker Huta Ostrowiec, never paid off. “There was over-leveraging of some purchases in Europe, such as for example in Poland. This, together with the real estate crisis and the industrial crisis that Spain experienced from 2008 to 2014, which caused the production and price of steel to fall , severely damaged the company: they were getting smaller and making less money”, market sources explain to ARA.
In 2018 the bank, still decimated by the Great Recession, divested itself of debt and sold it to international funds
Already in 2017, with considerable debt, the company closed the last refinancing of the debt in two tranches: a participatory credit for 2023, which was 1.4 billion euros, and a jumbo one, 800 million. In fact, business sources point out that if Xavier Pujol, from Ficosa, is still on the board of Celsa, it is precisely because of his experience in situations of over-indebted companies.
A year later, the initial creditors, CaixaBank, Banco Sabadell, Banco Santander and BBVA, began to divest themselves of much of the liability by selling it cheaper to specialized funds, such as Deutsche Bank, Sculptor, Golden Tree, Cross Ocean, SVP, Golden Street Asset and London Branch. The company suddenly lost control of a debt that was convertible into shares in case of default. The funds already had their H-bomb.
“The main strategic mistake of the company, once the last refinancing is closed, is to think that they already had everything done, even though the business plan was still very risky. They thought they would fulfill it”, explain the sources of the market consulted. “The most logical thing would have been to look for a good travel companion who would help them make the funds profitable, whether it was another fund or one of the creditors,” they add. But property remained inviolable.
Celsa’s situation worsened with covid, first, and with the energy crisis resulting from the Russian invasion of Ukraine. Fulfillment of debt repayment obligations was impossible to achieve.
Has the inevitable happened? Was there a possibility that the Rubiraltas would not lose the property, or that they would keep part of it? “Rubiralta son has moved a lot, he has a lot of contacts, but the move has not gone well for him”, answers a business source. Asked whether he has negotiated too aggressively, a business source consulted by this newspaper sighs: “A misses dites…” sighs one businessman. The truth is that in Celsa’s environment there is the conviction that the company made a mistake by being too aggressive with the funds.
The figure of the current president of Celsa is credited with admirable tenacity, with management at the highest level, and having worked tirelessly to prevent this outcome. An entrepreneur from another large family company makes this reflection: “The corporate world is pure Darwinism, and sometimes it’s not the biggest that survive, but the fittest; and they’ve been unlucky enough to this new law, the stars have aligned.”
“The corporate world is pure Darwinism, and sometimes it’s not the biggest who survive, but the fittest,” laments one entrepreneur
In fact, the role of the new bankruptcy law, which saw the light of day in September last year, has been key: it allows in fact that creditors can direct a restructuring procedure without needing the debtor’s consent.
When the situation was already at its limit, the Generalitat, at the hand of the then Minister of Economy, Jaume Giró, asked the vice-president of the central government, Nadia Calviño, to activate emergency aid for Celsa. This led to the granting of an injection from the State Industrial Participations Company (SEPI), which involved the rescue of the State with 550 million euros, and which only became effective if Celsa restructured its debt and the funds were waived to collect a part of it. This never materialized, although the aid was approved. A tug-of-war began in which the funds put on the table the waiver of 500 million in debt in exchange for 49% of the shares. But Rubiralta did not accept: he asked that 1,200 of the then 2,200 million debt be waived. His immobility was fateful.
To explain this proverbial negotiating toughness, business sources also point out that for decades the Rubiraltas have been advised by the Cortés Abogados firm, well known in legal circles for its aggressive way of proceeding.
Now, a week after this earthquake for the Catalan business ecosystem, it remains to be seen what the funds will do, which have already appointed a new president for Celsa, the historic Catalan manager Rafael Villaseca, and also if the council of ministers authorizes the operation “The funds will not keep it, they will try to sell it. I am convinced. Who has the possibility to buy it? A foreign company. The result, directly or indirectly, is that it will end up in foreign hands, and with that Celsa , the only steel production company that existed in Catalonia, loses Catalan ownership,” laments Francesc Cabana, who was also a co-founder of Banca Catalana.
Professor Pedro Nueno, who advised Rubiralta father for a few years, predicts a similar end: “I can’t imagine some funds managing a steel company, I guess what they will do is reduce the debt and sell it.”
Be that as it may, this will be a story that the Rubiraltas, who started out as two well-to-do brothers who ran the Vilaseca hardware store in Manresa, will see from afar. Celsa is no longer his.
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