News: Judge grants more time to decide fate of Liberty Speciality Steel
More time has been granted for the court case that could lead to Liberty's Speciality Steel business going into insolvency.
Rothbiz reported in July on the second adjournment for a winding-up order regarding the company which has operations in Rotherham and Stocksbridge.
Discussions have been ongoing - including a potential sale of the business, with media reports suggesting that Sanjeev Gupta, the owner of the GFG Alliance of which Speciality Steel UK Ltd (SSUK) is part, was planning a controversial pre-pack administration to set up a new company and keep hold of the operations whilst many creditors would lose out.
After the case was heard again in court this week, MP for Penistone & Stocksbridge Marie Tidball, confirmed another two week adjournment.
The MP said: "I have been fighting for our speciality steel site since day one. I am in regular touch with steelworkers locally, and I know the two week adjournment will cause anxiety for them and their families. However, evidence shared in court that government is preparing to step in immediately to secure the continued operations at Speciality Steel UK is extremely reassuring.
"Both LIBERTY sites in Stocksbridge and Rotherham are essential parts of our South Yorkshire Steel Corridor and their success is crucial to our national defence, aerospace, and energy industries.
"I do not believe that these sites can reach their potential under Sanjeev Gupta's continued ownership, and any outcome of the case should prioritise the long-term future of the plants, and protecting jobs to retain the fantastically skilled workforce at these sites.
"My immediate priority now will be securing pensions for Stocksbridge steelworkers, as local workers have faced nearly a year without employer pension contributions. I have raised this with the Department of Business and Trade, Aviva, and the Pensions Regulator. I will continue to press for them to take action, as well as LIBERTY, to resolve these issues as quickly as possible."
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Earlier this year, Liberty pulled a restructuring plan before it could be judged in court as it was apparent that it did not have the backing from creditors.
Liberty signed a new framework agreement in April 2024 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 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 SSUK 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 Telegraph yesterday reported on a Department for Business and Trade letter to Mr Gupta’s creditors that was used in court proceedings. It said that, through an official receiver, it was prepared to take control of SSUK’s affairs.
On the government being prepared to step in, Sarah Champion, MP for Rotherham, said on X: "Hand on heart, I don’t believe the Tories would have done this. So grateful this Government will."
The judge in the case has asked more information on what would happen under two scenarios - if SSUK was wound up, and if a pre-pack administration was to take place. The second scenario is likely to be opposed by creditors.
As reported in The Gaurdian, Judge Sally Barber said: “In the absence of some certainty there is too much at stake for the court to shoot blind.
“Any government decision [to step in immediately to secure the continued operations] would be subject to a formal ministerial decision, and no such decision has been made.”
Liberty Steel website
Images: Liberty
Rothbiz reported in July on the second adjournment for a winding-up order regarding the company which has operations in Rotherham and Stocksbridge.
Discussions have been ongoing - including a potential sale of the business, with media reports suggesting that Sanjeev Gupta, the owner of the GFG Alliance of which Speciality Steel UK Ltd (SSUK) is part, was planning a controversial pre-pack administration to set up a new company and keep hold of the operations whilst many creditors would lose out.
After the case was heard again in court this week, MP for Penistone & Stocksbridge Marie Tidball, confirmed another two week adjournment.
The MP said: "I have been fighting for our speciality steel site since day one. I am in regular touch with steelworkers locally, and I know the two week adjournment will cause anxiety for them and their families. However, evidence shared in court that government is preparing to step in immediately to secure the continued operations at Speciality Steel UK is extremely reassuring.
"Both LIBERTY sites in Stocksbridge and Rotherham are essential parts of our South Yorkshire Steel Corridor and their success is crucial to our national defence, aerospace, and energy industries.
"I do not believe that these sites can reach their potential under Sanjeev Gupta's continued ownership, and any outcome of the case should prioritise the long-term future of the plants, and protecting jobs to retain the fantastically skilled workforce at these sites.
"My immediate priority now will be securing pensions for Stocksbridge steelworkers, as local workers have faced nearly a year without employer pension contributions. I have raised this with the Department of Business and Trade, Aviva, and the Pensions Regulator. I will continue to press for them to take action, as well as LIBERTY, to resolve these issues as quickly as possible."
Advertisement
Earlier this year, Liberty pulled a restructuring plan before it could be judged in court as it was apparent that it did not have the backing from creditors.
Liberty signed a new framework agreement in April 2024 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 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 SSUK 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 Telegraph yesterday reported on a Department for Business and Trade letter to Mr Gupta’s creditors that was used in court proceedings. It said that, through an official receiver, it was prepared to take control of SSUK’s affairs.
On the government being prepared to step in, Sarah Champion, MP for Rotherham, said on X: "Hand on heart, I don’t believe the Tories would have done this. So grateful this Government will."
The judge in the case has asked more information on what would happen under two scenarios - if SSUK was wound up, and if a pre-pack administration was to take place. The second scenario is likely to be opposed by creditors.
As reported in The Gaurdian, Judge Sally Barber said: “In the absence of some certainty there is too much at stake for the court to shoot blind.
“Any government decision [to step in immediately to secure the continued operations] would be subject to a formal ministerial decision, and no such decision has been made.”
Liberty Steel website
Images: Liberty
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