Wednesday, April 10, 2024

News: Liberty to press on with Rotherham plan after signing new creditor framework agreement


Liberty Steel says that it has a comprehensive plan that aims to take its electric arc furnace (EAF) melting capacity at Rotherham to two million tonnes per annum quickly and cost effectively.

The opertator, part of Sanjeev Gupta's GFG Alliance, has confirmed for the first time that the South Yorkshire sites could use hydrogen to power steelmaking in the future. It is part of the company's GREENSTEEL plan which aims to recycle and upcycle the growing amount of scrap steel, using electric arc furnaces powered by renewable energy.

Hit by the collapse of Greensill, a specialist in invoice financing that operated with less regulation than the traditional banks, Liberty put in place a specialist committe to accelerate a restructuring and refinancing project which has seen investment and focus on Aldwarke in Rotherham.

Now Liberty has signed a new framework agreement with its major creditors which will enable it to consolidate its UK steel businesses "under a new entity with a simpler structure, a strong balance sheet and greater access to third party finance and investment."

UK operations have since October 2021 been supported by £210m loss funding by Liberty's shareholder to maintain employment, operations, and growth potential. 2023 included a restructuring programme affecting 440 roles - including 185 roles at its Rotherham sites.

Liberty said in a statement that it aims "to consolidate its steel businesses under a new entity and corporate structure. It is proposed that the existing companies will transfer their assets and employees to the new company, subject to final structuring and agreements. Employees will carry over existing terms and conditions, with continuity of employment preserved. There will be no impact on operations, suppliers or customers."

The operational restructuring plan implemented focused Liberty’s steel businesses in the UK on supplying strategic aerospace, defence and energy customers, strengthening financial performance significantly. This is said to have improved operational and commercial viability and has enabled development of a comprehensive plan that aims to take EAF melting capacity at Rotherham to 2 million tonnes per annum quickly and cost effectively, and with significantly lower emissions compared with coal-based blast furnaces.

The country’s largest electric arc furnaces in Rotherham and associated downstream mills around the country, "benefit from product diversity with significant capacity in both long and flat products, scalable grid connections, scrap metal processing and proximity to future hydrogen trunkline delivery and planned carbon capture and storage (CCS) networks," the company said.

Jeffrey Kabel, Chief Transformation Officer at Liberty, said: “Following our successful capital raising in 2023 we are now in a position to execute this new updated creditor framework. The completion of the deal will enable our businesses to build on the operational, commercial and governance improvements we’ve made across the group over the past three years.

"In the UK our focus on specialised steel products serving strategic supply chains in aerospace, defence and energy, has allowed us to stabilise operations and significantly improve business performance. Our restructuring agreement now paves the way for a new company structure that will allow us to significantly increase our lower carbon emissions steel production in Rotherham feeding our network of downstream mills around the country.

"While we still operate in challenging market conditions, these changes will put our UK businesses in a position to reclaim its leading position as champion of green steel and sustainable industry. Upon completion of the deal, this will enable us to raise new capital, rebuild stakeholder confidence, and ultimately reach our full potential.

"With our existing strengths in sustainable UK steel and aluminium production, and our magnetite mining resources in Australia to supply the production of DRI, we are prepared to play a leading role in the UK’s Net Zero strategy, and the development of a clean and thriving UK steel sector.”

Liberty Steel website

Images: Liberty Steel


Jez April 12, 2024 at 6:37 AM  

Great news if it comes off

Anonymous,  April 12, 2024 at 3:55 PM  

Shall we have a sweepstake when the next mass redundancy takes place?

Anonymous,  April 16, 2024 at 6:46 PM  

Rinse and repeat restructure in a few years when they want more money.

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