News: Liberty lurches from one legal battle to the next over insolvency
Liberty Speciality Steel withdrew a restructuring plan put before the courts just before a judge was due to decide if it could go ahead.
With a lack of agreement with key creditors, lawyers representing them have previously said it was unlikely to be sanctioned anyway due to the money owed.
After pulling its "Part 26A" restructuring plan, as reported by Global Restructuring Review, Liberty Speciality Steel, which has operations in Rotherham and Stocksbridge, is understood to be acting quickly to consider alternative options.
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 UK 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.
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.
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,
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One creditor is Harsco, which operates a large site in Rotherham under its SteelPhalt brand. Court documents show that Harsco issued a winding-up petition against Liberty in 2024 in an effort to recover £4m that it is owed, along with machinery "for which it has not been paid and which it would like back."
Harsco has been against the restructuring plan with its lawyers saying: "everyone in the room knew that it was unlikely to be sanctioned" by the judge.
A winding up petition is issued to the courts by those seeking to recover money that they are owed. The courts do not look on it as a debt recovery process, rather that the company can't pay its debts and should be wound up so that liquidation can be used to collect the company's assets.
HM Revenue & Customs (HMRC) issued a petition to have Liberty Speciality Steel wound up in 2022 but following positive discussions, the petitions were withdrawn.
A decision on the latest winding-up order is due this week. If the court approves, Liberty will be served the order and the official receiver automatically becomes the liquidator. An alternative is if a private liquidator is appointed.
Oliver Coppard, mayor of South Yorkshire, said last week: “The news emerging about Liberty Steel is deeply concerning for all of us in South Yorkshire, but particularly those who work in their plants at Rotherham and in Stockbridge. I spoke with the Business Secretary yesterday (Thursday) to raise our concerns and we agreed to work together as more details emerge and the situation develops.
“Our steel industry has been integral to our identity and economy for generations. While the challenges we face are significant, I'm committed to working alongside industry leaders, unions, and government partners to explore all possible avenues to safeguard jobs, support our steel sector and ensure that South Yorkshire remains at the forefront of advanced manufacturing.”
Following the government stepping in to save British Steel in Scunthorpe, local MPs have discussed the potential for similar action in South Yorkshire.
Marie Tidball, MP for Stocksbridge, said: "The Steel Industry (Special Measures) Act, passed last month, demonstrates clear reassurance that the Government will do everything they can to get it right for our British steel industry, including a commitment to using our steel assets productively. This must include Stocksbridge.
"Our local plant has strategically significant highly specialist capability to produce world-leading steel, which is crucial to our national defence, aerospace, and energy industries.
"The Government have committed £2.5 billion to secure the UK steel industry, and have always been clear that there is a bright future for steel in the UK. I am working around the clock to ensure that Stocksbridge is an integral part of that.
"Our steelworks has been the beating heart of our community for nearly 200 years, and I will continue to fight to protect our site, our jobs, and the strategic capability our site can offer."
Liberty Steel website
Images: Liberty Steel
With a lack of agreement with key creditors, lawyers representing them have previously said it was unlikely to be sanctioned anyway due to the money owed.
After pulling its "Part 26A" restructuring plan, as reported by Global Restructuring Review, Liberty Speciality Steel, which has operations in Rotherham and Stocksbridge, is understood to be acting quickly to consider alternative options.
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 UK 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.
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.
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,
Advertisement
One creditor is Harsco, which operates a large site in Rotherham under its SteelPhalt brand. Court documents show that Harsco issued a winding-up petition against Liberty in 2024 in an effort to recover £4m that it is owed, along with machinery "for which it has not been paid and which it would like back."
Harsco has been against the restructuring plan with its lawyers saying: "everyone in the room knew that it was unlikely to be sanctioned" by the judge.
A winding up petition is issued to the courts by those seeking to recover money that they are owed. The courts do not look on it as a debt recovery process, rather that the company can't pay its debts and should be wound up so that liquidation can be used to collect the company's assets.
HM Revenue & Customs (HMRC) issued a petition to have Liberty Speciality Steel wound up in 2022 but following positive discussions, the petitions were withdrawn.
A decision on the latest winding-up order is due this week. If the court approves, Liberty will be served the order and the official receiver automatically becomes the liquidator. An alternative is if a private liquidator is appointed.
Oliver Coppard, mayor of South Yorkshire, said last week: “The news emerging about Liberty Steel is deeply concerning for all of us in South Yorkshire, but particularly those who work in their plants at Rotherham and in Stockbridge. I spoke with the Business Secretary yesterday (Thursday) to raise our concerns and we agreed to work together as more details emerge and the situation develops.
“Our steel industry has been integral to our identity and economy for generations. While the challenges we face are significant, I'm committed to working alongside industry leaders, unions, and government partners to explore all possible avenues to safeguard jobs, support our steel sector and ensure that South Yorkshire remains at the forefront of advanced manufacturing.”
Following the government stepping in to save British Steel in Scunthorpe, local MPs have discussed the potential for similar action in South Yorkshire.
Marie Tidball, MP for Stocksbridge, said: "The Steel Industry (Special Measures) Act, passed last month, demonstrates clear reassurance that the Government will do everything they can to get it right for our British steel industry, including a commitment to using our steel assets productively. This must include Stocksbridge.
"Our local plant has strategically significant highly specialist capability to produce world-leading steel, which is crucial to our national defence, aerospace, and energy industries.
"The Government have committed £2.5 billion to secure the UK steel industry, and have always been clear that there is a bright future for steel in the UK. I am working around the clock to ensure that Stocksbridge is an integral part of that.
"Our steelworks has been the beating heart of our community for nearly 200 years, and I will continue to fight to protect our site, our jobs, and the strategic capability our site can offer."
Liberty Steel website
Images: Liberty Steel
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