News: Rotherham MP raises concerns over Liberty Steel restructure
Sarah Champion, the MP for Rotherham, says that she is "deeply troubled" by reports that Liberty Speciality Steel could fail to be part of proposed restructuring plans due to a lack of agreement with key creditors.
Rothbiz reported in April last year that Liberty had 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."
In November 2024, Liberty sought approval through the courts for the restructuring which would reduce the company's debts but needs the approval of the majority of creditors.
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.
Argus reported earlier this month that there was a restructuring plan hearing held in April, where all Greensill creditors and over three quarters of "other" creditors opposed the restructuring, which was set to be voted on by a judge at a sanction hearing this week.
Sarah Champion said that Liberty's Speciality Steels UK (SSUK) potentially withdrawing from restructuring is "deeply worrying and will be a cause of great concern to Liberty employees in Rotherham."
A judge was due to decide if restructuring can go ahead. Without the plan, SSUK would likely head towards administration, winding up and liquidation.
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The MP said: "I am extremely worried that this decision places in doubt the future of steel making at Liberty's sites in my constituency.
"It is crucial that agreement is reached between Liberty and its creditors to ensure the future of Rotherham’s steelworks, and the businesses throughout their supply chains that depend upon them.
"I have written to Liberty Steel seeking urgent clarity on the implications of these reports and will be doing all that I can to safeguard the future of steel production in Rotherham."
Liberty put in place a specialist committee to accelerate a restructuring and refinancing project which has seen investment and focus on Aldwarke in Rotherham.
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.
Court documents from February regarding Greensill creditors and Speciality Steel UK Ltd show that the Liberty company has a debt with them of approximately £289m. The debts owed to Greensill creditors in respect of the activities of the GFG Group amount, in broad terms, to some US$4 billion.
The government recently published its Plan for Steel which reiterated that up to £2.5 billion would be put towards supporting the steel industry,
Liberty continues to call for strategic capability investments including a new Electric Arc Furnace (EAF) and slab caster at the Rotherham mill "which could increase the site’s production capacity from 1.2Mtpa to 2Mtpa and provide the UK with the capability needed for the next generation of offshore wind towers."
Liberty Steel website
Images: Google Maps
Rothbiz reported in April last year that Liberty had 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."
In November 2024, Liberty sought approval through the courts for the restructuring which would reduce the company's debts but needs the approval of the majority of creditors.
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.
Argus reported earlier this month that there was a restructuring plan hearing held in April, where all Greensill creditors and over three quarters of "other" creditors opposed the restructuring, which was set to be voted on by a judge at a sanction hearing this week.
Sarah Champion said that Liberty's Speciality Steels UK (SSUK) potentially withdrawing from restructuring is "deeply worrying and will be a cause of great concern to Liberty employees in Rotherham."
A judge was due to decide if restructuring can go ahead. Without the plan, SSUK would likely head towards administration, winding up and liquidation.
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The MP said: "I am extremely worried that this decision places in doubt the future of steel making at Liberty's sites in my constituency.
"It is crucial that agreement is reached between Liberty and its creditors to ensure the future of Rotherham’s steelworks, and the businesses throughout their supply chains that depend upon them.
"I have written to Liberty Steel seeking urgent clarity on the implications of these reports and will be doing all that I can to safeguard the future of steel production in Rotherham."
Liberty put in place a specialist committee to accelerate a restructuring and refinancing project which has seen investment and focus on Aldwarke in Rotherham.
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.
Court documents from February regarding Greensill creditors and Speciality Steel UK Ltd show that the Liberty company has a debt with them of approximately £289m. The debts owed to Greensill creditors in respect of the activities of the GFG Group amount, in broad terms, to some US$4 billion.
The government recently published its Plan for Steel which reiterated that up to £2.5 billion would be put towards supporting the steel industry,
Liberty continues to call for strategic capability investments including a new Electric Arc Furnace (EAF) and slab caster at the Rotherham mill "which could increase the site’s production capacity from 1.2Mtpa to 2Mtpa and provide the UK with the capability needed for the next generation of offshore wind towers."
Liberty Steel website
Images: Google Maps
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