PRAGUE, Dec 20 (Reuters) - The Czech industry minister on Wednesday called on the owners of steel maker Liberty Ostrava to return money lent to related parties to the firm.

Liberty, which has an annual capacity of 3.6 million metric tons of steel and employs about 6,000, is on the brink of collapse after its energy supplier declared insolvency over missed payments from the steel maker and prepared to cut off energy supplies.

The company, whose parent Liberty Steel is owned by commodities tycoon Sanjeev Gupta, has idled production and shut-off furnaces as it battles a decline in the European steel market.

After meeting Liberty Ostrava representatives, Industry and Trade Minister Jozef Sikela said the state would consider various options including an insolvency petition, depending on modifications it requested to a restructuring plan and the owners' willingness to return cash into the company.

He said Liberty was owned 7 billion crowns ($313 million) by related firms and the state was owned 1.5 billion crowns by Liberty.

"The decisive factor will be a clear commitment from the group, that means a materially significant sum...flowing back into the firm in January and following months," Sikela said a briefing shown live on television.

He said Liberty, which won a court order in November protecting it from its energy supplier Tameh, assured him that the production shutdown was reversible and that employees would continue to receive salaries.

Liberty Ostrava and its parent Liberty Steel Group did not immediately respond to a request for comment.

Tameh was declared insolvent on Tuesday after Liberty, its main customer, missed payments. It expects to finish shutting down supplies to Liberty by Thursday afternoon.

A spokesperson for the Czech company earlier said that some employees would continue to work to maintain equipment while others would remain at home.

($1 = 22.3300 Czech crowns)

https://www.reuters.com/markets/commodities/czech-minister-calls-liberty-ostrava-steel-owners-return-cash-firm-2023-12-20/