Liberty Steel has called a High Court decision to send its speciality steel business into compulsory liquidation "irrational" and says it put forward plans to create a "sustainable operational platform."
Rothbiz reported this week that a judge has approved an application from creditors to place the business, ehich has operations in Rotherham and Stocksbridge, into compulsory liquidation.
Official Receiver, Gareth Allen, has been appointed as liquidator with Teneo Financial Advisory Limited appointed as Special Managers of the company to assist the Official Receiver with the liquidation.
Jeffrey Kabel, LIBERTY Steel Group’s Chief Transformation Officer, said: “The decision to push Speciality Steel U.K. into compulsory liquidation, especially when we have support from the world’s largest asset manager to resume operations and facilitate creditor recovery is irrational.
"The plan that GFG presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight.
"Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution.
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"LIBERTY has pursued all options to make its SSUK viable, including efficiency improvements, reorganisations, customer support, several attempts to find a buyer for the business and intensive negotiations with creditors to restructure debt liabilities. LIBERTY’s shareholder has invested nearly £200mn, recognising the vital role steel plays in supplying the UK’s strategic defence, aerospace and energy industries.
"GFG will now continue to advance its bid for the business in collaboration with prospective debt and equity partners and will present its plan to the official receiver. GFG continues to believe it has the ideas, management expertise and commitment to lead SSUK into the future and attract major investment. GFG’s other significant business interests in the UK remain unaffected.
"Despite many challenges facing the group and the difficult market conditions, GFG has invested over £2 billion into the UK economy since 2013, ensuring the survival of many GFG businesses despite operating losses and safeguarding thousands of jobs that would otherwise have been lost.”
Liberty's plan is reported to have been a pre-pack administration deal which would have seen creditors lose out.
MP for Penistone & Stocksbridge Marie Tidball, said: "I know that steelworkers and other employees will have a number of queries about what happens next, and I will continue to work closely with Community Union around ongoing job security.
"From day one, I have advocated for the importance of the Speciality Steel UK sites as part of South Yorkshire's Steel Corridor, and the need to secure their future.
"It is reassuring to hear that the Secretary of State for Business, Jonathan Reynolds, has described our steelworks and its workers as important strategic assets for the UK, and wants them to have a strong future as part of the UK's overall steel strategy.
"It is positive to hear that that the Government has already received approaches from "independent third parties who have expressed an interest in returning some or all of the sites to steel making," according to a letter from the Department for Business and Trade entered in court.
"I want to thank all our local steelworkers and their families for all their hard work and patience throughout this difficult process."
Liberty Steel website
Images: Liberty Steel
Rothbiz reported this week that a judge has approved an application from creditors to place the business, ehich has operations in Rotherham and Stocksbridge, into compulsory liquidation.
Official Receiver, Gareth Allen, has been appointed as liquidator with Teneo Financial Advisory Limited appointed as Special Managers of the company to assist the Official Receiver with the liquidation.
Jeffrey Kabel, LIBERTY Steel Group’s Chief Transformation Officer, said: “The decision to push Speciality Steel U.K. into compulsory liquidation, especially when we have support from the world’s largest asset manager to resume operations and facilitate creditor recovery is irrational.
"The plan that GFG presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight.
"Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution.
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"LIBERTY has pursued all options to make its SSUK viable, including efficiency improvements, reorganisations, customer support, several attempts to find a buyer for the business and intensive negotiations with creditors to restructure debt liabilities. LIBERTY’s shareholder has invested nearly £200mn, recognising the vital role steel plays in supplying the UK’s strategic defence, aerospace and energy industries.
"GFG will now continue to advance its bid for the business in collaboration with prospective debt and equity partners and will present its plan to the official receiver. GFG continues to believe it has the ideas, management expertise and commitment to lead SSUK into the future and attract major investment. GFG’s other significant business interests in the UK remain unaffected.
"Despite many challenges facing the group and the difficult market conditions, GFG has invested over £2 billion into the UK economy since 2013, ensuring the survival of many GFG businesses despite operating losses and safeguarding thousands of jobs that would otherwise have been lost.”
Liberty's plan is reported to have been a pre-pack administration deal which would have seen creditors lose out.
"From day one, I have advocated for the importance of the Speciality Steel UK sites as part of South Yorkshire's Steel Corridor, and the need to secure their future.
"It is reassuring to hear that the Secretary of State for Business, Jonathan Reynolds, has described our steelworks and its workers as important strategic assets for the UK, and wants them to have a strong future as part of the UK's overall steel strategy.
"It is positive to hear that that the Government has already received approaches from "independent third parties who have expressed an interest in returning some or all of the sites to steel making," according to a letter from the Department for Business and Trade entered in court.
"I want to thank all our local steelworkers and their families for all their hard work and patience throughout this difficult process."
Liberty Steel website
Images: Liberty Steel
This needs sorting and quickly. The country cannot afford to lose another key player in the manufacture of special steels.
ReplyDeleteUnlike the Tories this government is at least stepping in to save what's left of our industrial base. The last lot just sold them off or allowed them to rot.
ReplyDelete🤡🤣🤣🤣🤣🤣 Delusional
DeleteIs he?
DeleteWhat about the state of our water industry? No investment on infrastructure and all the profits going to shareholders. What about our electricity generation capacity? Ditto.
I really feel for the workers here, jobs in doubt is a hugh worry. This government stepping in. Aka the tax payer then, you and me. If the business hasn't being run well and is in such a sorry state, then why should we foot the bill in the short term.
ReplyDeleteNo doubt China, Russia, Japan, South Korea and India would agree with you. Hopefully those with an ounce of common sense in this country won't.
DeleteSo that we have a viable steel industry in the future? I can think of far worse uses for tax payers money,
DeleteSo you don't worry or feel enough about steel workers losing their jobs to shell out a few bob extra im tax? I'm sure the steel workers will be grateful for your concern.
DeleteWell if you don't know the answer to that then you know nothing about international finance, economics, politics, strategic defence capabilities, or world trade.
ReplyDeleteIn one form or another every steel producing country in the world provides tax funded incentives to protect their industries and workers. It would be foolish in the extreme if laissez-faire dogma got in the way of the UK doing the same.
ReplyDeleteYes, God forbid that we should have to pay more tax to save our staple industries or revitalise the NHS when we can let them die or sell them off.
ReplyDeleteAs a shareholder I welcome any Government selling off industries like water, gas and electricity. Money for old rope.
ReplyDelete