Tuesday, May 25, 2021

News: Sale signs go up at South Yorkshire steel sites


Liberty Steel has announced its intention to sell some of its South Yorkshire sites as part of a restructuring and refinancing linked to its exposure with Credit Suisse Asset Management.

The electric arc furnace at Aldwarke in Rotherham is set to be retained by Liberty Steel where increasing production is still being discussed.

The company, part of Sanjeev Gupta's GFG Alliance, employs hundreds of staff in South Yorkshire, including in Rotherham. It recently appointed new directors in response to the collapse of its principal lender, Greensill Capital. Credit Suisse managed a number of Supply Chain Finance (SCF) Funds linked to Greensill.

As part of this restructuring Liberty said that it will look to sell its aerospace and special alloys steel business in Stocksbridge, Sheffield which while being a unique, high quality business servicing marquee customers in aerospace, auto and other highly engineered applications, is not considered core to its GREENSTEEL vision.

A formal sale process for Stocksbridge and its downstream plants, the narrow strip mill at Brinsworth, Rotherham and Performance Steels at West Bromwich, will be launched shortly.

The Brinsworth mill was one of the leading hot rolled narrow strip producers in the world and offers steel grades, from low carbon and free cutting steels to high carbon, alloy and stainless steels, offer varying strength, formability, durability and hardness properties.

The narrow strip is manufactured to the exacting specifications demanded by highly specialised, quality-critical sectors across the world such as cold rollers, keys, agricultural, automotive and aviation.

Liberty Steel said in a statement: "This sale will allow Liberty to focus on developing its Rotherham plant including its electric arc furnaces into a competitive 2 million tonnes recycled GREENSTEEL plant, one of the largest in Europe. The plant will make use of some of the millions of tons of steel scrap currently exported by the UK to make more of the quality steel needed in the UK, which is currently being imported."

At the end of 2020, the company committed £60m at its South Yorkshire GREENSTEEL production hub at Rotherham to boost production to over one million tonnes per annum.

A change of owners is nothing new for the sites in South Yorkshire. The Liberty House arm completed a £100m deal to acquire the Speciality Steels division of Tata Steel UK in 2017. It followed a shock announcement from the Indian-owned steelmaker after it concluded that it was exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. Tata bought the South Yorkshire sites when it concluded a £6.7 billion Corus takeover in 2007.

Read reaction to the announcement on Rothbiz here.

Liberty Steel website

Images: Liberty Steel / Richard Bradshaw


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