Thursday, October 14, 2021

News: Reaction to restart of Rotherham steelworks


The news that Liberty is to invest £50m into restarting steel production at its Aldwarke site in Rotherham has been welcomed and described as a "step in the right direction."

The company, part of Sanjeev Gupta's GFG Alliance, employs hundreds of staff in South Yorkshire and has struggled following the collapse of its principal lender, Greensill Capital.

In an update on restructuring and refinancing progress, GFG said that it will inject £50m of shareholder funds into Liberty Steel UK to allow time to prove the operations can run efficiently which will enable them to finalise longer term debt restructuring.

Wentworth & Dearne MP John Healey said: “This is a breakthrough after months while Liberty workers have been left in limbo. Liberty is at the heart of steelmaking in Rotherham, and we’ve been holding our breath for the working capital to restart production. But £50 million won’t be enough for long, so full long-term refinancing for Liberty UK now needs to follow rapidly from the deal for Liberty Australia. Only then, will Rotherham breathe more easily.

“It’s a year since I first met with Sanjeev Gupta on site at Rotherham to discuss Liberty’s future financing and growth. He’s proved the company can get new finance agreed with creditors for Australia, now they must do the same for the UK.

“Urgent government action is also needed to deal with the growing crisis for firms hit by the crippling rise in their energy costs. British Ministers have so far washed their hands of this growing crisis, when governments in the rest of Europe have stepped in to support their industry, even though their steelmakers have lower energy costs.”

Mayor of South Yorkshire Dan Jarvis said: "This is a welcome announcement for the steel industry and South Yorkshire, which will get operations up and running at two key sites in our region.

"Steel is a strategic sector for the UK economy and with the right support can have a bright future - providing good jobs and prosperity with the transition to green steel.

"That's why we need industry, government and trade unions to continue working together to safeguard steel's future, protecting jobs and businesses in the supply chain for the long-term."

Roy Rickhuss CBE, General Secretary of Community, the steelworkers’ union, said: “This news is well overdue, but it’s an important step in the right direction and demonstrates that GFG can raise funds for the UK. Huge challenges remain but the workforce is ready to get back to making the best steels money can buy, and the £50 million injection will enable us to restart steelmaking.

"The Government must play their part and act now to protect our industry from the consequences of soaring energy prices. Other European countries have already acted, and Britain’s steelworkers want to know why our politicians are sitting on their hands. Brexit was supposed to make it easier for the Government to back British industry and British jobs, but we’re just seeing the same old hand-wringing and excuses for doing nothing.”

Liberty website

Images: Liberty


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