News: Liberty Steel asks for creditor support over restructure
Liberty's Speciality Steels UK (SSUK), which has operations in Rotherham, is pressing ahead with a restructure.
The move will likely impact on the company's creditors, but not lead to redundancies.
The company, part of Sanjeev Gupta's GFG Alliance, was 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 committee to accelerate a restructuring and refinancing project which has seen investment and focus on Aldwarke in Rotherham.
In April, Liberty signed a new framework agreement with its major creditors that would 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."
Reports now say that approval through the courts is being sought for the restructuring which would reduce the company's debts but needs the approval of the majority of creditors.
An update from Liberty Steel said that creditors will be presented with a detailed proposal and will have the opportunity to vote on the plan, adding: "The proposed plan has no impact on SSUK employees.
"Once implemented SSUK will be better positioned to attract new capital and further expand its operations into strategic steel segments with environmentally conscious products."
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.
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Jeffrey Kabel, Liberty Steel group chief transformation officer, said: "After making significant progress to stabilise the business and refocus it on high value specialist products, we're now addressing the debt position of the company to create a stronger speciality business going forward.
"Our plan, which is backed by customers, is the best route forward for all stakeholders and we're confident in winning the support of our creditors for the essential actions required to complete SSUK's recovery."
In recent months there has been little sign of production at the Rotherham electric arc furnace (EAF), at least during the day, and there have been reports of the workforce remaining on furlough and late wage payments.
In 2022, HM Revenue & Customs (HMRC) issued a petition to have the speciality steel company wound up, but later backed down. Financial firms Citibank and Credit Suisse were considering whether to continue with their own winding up petition.
The operational restructuring plan has 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.
Liberty Steel website
Images: Google Maps
The move will likely impact on the company's creditors, but not lead to redundancies.
The company, part of Sanjeev Gupta's GFG Alliance, was 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 committee to accelerate a restructuring and refinancing project which has seen investment and focus on Aldwarke in Rotherham.
In April, Liberty signed a new framework agreement with its major creditors that would 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."
Reports now say that approval through the courts is being sought for the restructuring which would reduce the company's debts but needs the approval of the majority of creditors.
An update from Liberty Steel said that creditors will be presented with a detailed proposal and will have the opportunity to vote on the plan, adding: "The proposed plan has no impact on SSUK employees.
"Once implemented SSUK will be better positioned to attract new capital and further expand its operations into strategic steel segments with environmentally conscious products."
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.
Advertisement
Jeffrey Kabel, Liberty Steel group chief transformation officer, said: "After making significant progress to stabilise the business and refocus it on high value specialist products, we're now addressing the debt position of the company to create a stronger speciality business going forward.
"Our plan, which is backed by customers, is the best route forward for all stakeholders and we're confident in winning the support of our creditors for the essential actions required to complete SSUK's recovery."
In recent months there has been little sign of production at the Rotherham electric arc furnace (EAF), at least during the day, and there have been reports of the workforce remaining on furlough and late wage payments.
In 2022, HM Revenue & Customs (HMRC) issued a petition to have the speciality steel company wound up, but later backed down. Financial firms Citibank and Credit Suisse were considering whether to continue with their own winding up petition.
The operational restructuring plan has 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.
Liberty Steel website
Images: Google Maps
5 comments:
Cannot believe this company is still allowed to trade. Absolutely shocking company to work for, no security and no morals from the owners.
They are taking all stakeholders for fools.
A typical employer then...
Don't be too hard on them, they really look after top management.
If I'm reading this right he is saying, if the companies he owes money to write the debt off his company will not have as much debt so they will be able to borrow more money. But he has no idea how he will pay them back!!! You've got to admire his brass neck
if it survives the lastest round of debt collectors its still got to answer for not publishing its accounts right now they have steel to sell but cant as they cant finish it as they ran out of consumables no one will sell them anything as they owe too much which im sure customers are happy with given they paid for it up front! ive also heard they cant run fully on the 10 shift manning as too many have now left they keep rattling on about 2 million tonnes a year hahahaha 5th year of furlough seems to be looming
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