Hundreds of Welsh steel jobs have been safeguarded after Spanish steel giant Celsa (www.celsauk.com) — the UK’s second-largest steel producer — agreed a refinancing deal with a consortium of Spanish lenders that will halve its ‘debt pile’ from 2.67 billion euros (£2.4 billion) to 1.43 billion euros over five years (the remaining 1.24 billion euros will be taken off the company’s balance sheet until it matures in 2023, giving Celsa some breathing space).

The company employs about 600 workers making steel at its Cardiff plant, plus another 1,400 employees around the UK.

There was speculation earlier this year that the debt mountain would force Celsa into a round of cost cuts, job losses and disposals, as lenders piled on the pressure.

However, the company has avoided the staff reductions and site sales or closures that other steel makers were forced into two years ago, when the sector was hit by a combination of cheap Chinese imports, rising raw-material costs and high energy prices.

Celsa said the deal would “normalise its financial situation”. It now expects a turnover of 4.5 billion euros this year and pre-tax earnings of 450 million euros — increases of 30% and 50% respectively.

The company said in a statement: “This agreement gives full support to our strategic plan and allows us to look to the future with guarantees.”

Celsa’s UK operations make rebar steel (used in construction to reinforce concrete) and have an annual production capacity of 1.1 million tonnes, although they are thought to be working at about 70% of their capacity at the moment.

The company won a £100 million deal last year to supply 200,000 tonnes of steel for the new power station at Hinkley Point, and it has also been boosted by the rising price of rebar.