News: Liberty to pump £50m into UK, restarting production in Rotherham
£50m of new funding is to be injected into UK operations enabling the restart of Liberty Steel's core Rotherham electric arc furnace.
Earlier this year Liberty Steel appointed four experienced board directors to lead and accelerate a restructuring and refinancing in order to protect and maximise creditor and stakeholder value. It was the firm's response to the collapse of its principal lender, Greensill Capital.
The company, part of Sanjeev Gupta's GFG Alliance, employs hundreds of staff in South Yorkshire, including at Aldwarke in Rotherham.
In an update on restructuring and refinancing progress, GFG said that it had agreed a debt restructuring with Credit Suisse for its Australian business.
In the UK, GFG said that it will inject £50m of shareholder funds into Liberty Steel UK (LSUK), through a new separate corporate entity Liberty Capital. LSUK will run as normal with funding for growth in working capital approved through Liberty Capital.
The update said that: "This arrangement will ensure fast and effective deployment of the £50m in initial funds in the UK, enabling LSUK to restart its operations. This will allow time to prove the operations can run efficiently which will enable them to finalise longer term debt restructuring."
At Aldwarke there is a significant opportunity to expand recycling of scrap steel for growth markets such as infrastructure and engineering. Production ramp up will commence in October 2021 with a plan to reach 50,000 tonnes per month as soon as possible.
The restart of operations will enable staff to return to work, many from furlough, setting the platform for LSUK’s longer term refinancing and delivery of its plan to expand Rotherham’s capacity, creating a two million tonnes per annum GREENSTEEL plant.
The GREENSTEEL strategy focuses on using electric arc furnaces, like the one at Aldwarke in Rotherham, to recycle scrap steel, rather than producing all material from scratch, as well as using renewable sources of energy.
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Liberty said that the latest investment plans in Rotherham will boost production capacity, increase employment and introduce new products. The plans have been presented to and reviewed by industry consultants on behalf of Trade Unions. A separate report was prepared by advisors to the significant lenders to the UK businesses. LSUK’s downstream operations remain core to LSUK’s asset base and will provide downstream capacity for Rotherham’s output, enabling increased shift opportunities at the Thrybergh and Scunthorpe mills.
As part of restructuring Liberty said in May that it would look to sell its aerospace and special alloys steel business in Stocksbridge and other downstream plants, such as the narrow strip mill at Brinsworth, Rotherham.
The latest injection of funding will also enable LSUK’s speciality steel division to run focussed production campaigns for key customers. This will support business continuity, establish a stable operating environment and create an attractive asset.
Sanjeev Gupta, Executive Chairman of GFG Alliance, said: "GFG’s injection of funding to restart the LIBERTY Steel UK operations is an important step on our road to creating a sustainable UK business. It will allow time to prove the operations can run efficiently which will enable us to finalise longer debt restructuring. The plan highlights the progress we have made since Greensill’s collapse and has secured the support of both creditors and unions.
“LIBERTY believes as strongly as ever that its GREENSTEEL strategy is the way to reinvent the UK steel sector for a sustainable future. The funding commitment we’re making at Rotherham will safeguard jobs, enable us to benefit from strong outlook for our core sectors and lay the platform to create a sustainable UK business that will generate skilled jobs in industrial communities."
Liberty Steel website
Images: Liberty Steel
Earlier this year Liberty Steel appointed four experienced board directors to lead and accelerate a restructuring and refinancing in order to protect and maximise creditor and stakeholder value. It was the firm's response to the collapse of its principal lender, Greensill Capital.
The company, part of Sanjeev Gupta's GFG Alliance, employs hundreds of staff in South Yorkshire, including at Aldwarke in Rotherham.
In an update on restructuring and refinancing progress, GFG said that it had agreed a debt restructuring with Credit Suisse for its Australian business.
In the UK, GFG said that it will inject £50m of shareholder funds into Liberty Steel UK (LSUK), through a new separate corporate entity Liberty Capital. LSUK will run as normal with funding for growth in working capital approved through Liberty Capital.
The update said that: "This arrangement will ensure fast and effective deployment of the £50m in initial funds in the UK, enabling LSUK to restart its operations. This will allow time to prove the operations can run efficiently which will enable them to finalise longer term debt restructuring."
At Aldwarke there is a significant opportunity to expand recycling of scrap steel for growth markets such as infrastructure and engineering. Production ramp up will commence in October 2021 with a plan to reach 50,000 tonnes per month as soon as possible.
The restart of operations will enable staff to return to work, many from furlough, setting the platform for LSUK’s longer term refinancing and delivery of its plan to expand Rotherham’s capacity, creating a two million tonnes per annum GREENSTEEL plant.
The GREENSTEEL strategy focuses on using electric arc furnaces, like the one at Aldwarke in Rotherham, to recycle scrap steel, rather than producing all material from scratch, as well as using renewable sources of energy.
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Liberty said that the latest investment plans in Rotherham will boost production capacity, increase employment and introduce new products. The plans have been presented to and reviewed by industry consultants on behalf of Trade Unions. A separate report was prepared by advisors to the significant lenders to the UK businesses. LSUK’s downstream operations remain core to LSUK’s asset base and will provide downstream capacity for Rotherham’s output, enabling increased shift opportunities at the Thrybergh and Scunthorpe mills.
As part of restructuring Liberty said in May that it would look to sell its aerospace and special alloys steel business in Stocksbridge and other downstream plants, such as the narrow strip mill at Brinsworth, Rotherham.
The latest injection of funding will also enable LSUK’s speciality steel division to run focussed production campaigns for key customers. This will support business continuity, establish a stable operating environment and create an attractive asset.
Sanjeev Gupta, Executive Chairman of GFG Alliance, said: "GFG’s injection of funding to restart the LIBERTY Steel UK operations is an important step on our road to creating a sustainable UK business. It will allow time to prove the operations can run efficiently which will enable us to finalise longer debt restructuring. The plan highlights the progress we have made since Greensill’s collapse and has secured the support of both creditors and unions.
“LIBERTY believes as strongly as ever that its GREENSTEEL strategy is the way to reinvent the UK steel sector for a sustainable future. The funding commitment we’re making at Rotherham will safeguard jobs, enable us to benefit from strong outlook for our core sectors and lay the platform to create a sustainable UK business that will generate skilled jobs in industrial communities."
Liberty Steel website
Images: Liberty Steel
2 comments:
Okay, so £50 Million dosh pumped into Rotherham steelmaking, but who in the world of all that's crazy will buy the new steel that's produced?
Possibly all of us who's steel prices have doubled and nearly trebled in the last year due to the shortage of steel....
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