News: "Multiple companies" interested in Speciality Steel business
Multiple companies are interested and have come forward regarding the operations of Liberty Speciality Steels UK, the Minister for Industry has confirmed.
A Parliamentary debate took place this week over the insolvency of the company following the approval by a judge of an application from creditors to place the business, previously part of Liberty Steel and GFG Alliance, into compulsory liquidation.
Speaking during the debate, Minister for Industry, Sarah Jones said: "We believe that this viable industry is languishing unnecessarily. The Government will provide the right support through interventions such as our energy reduction measures, and work with the official receiver.
"Multiple companies are interested and coming forward, and we need to establish how viable those offers are and what the best situation is. Of course, the official receiver must think of the best outcome for the creditors, but we take a close interest in that.
"I very much believe that the steelmaking sites in Rotherham, Stocksbridge, Brinsworth and Wednesbury have a future. I am keen to see them return to production, but that has to be achieved through private investment by an owner who can invest in the workforce and in the future of the business so that they put it on a long-term, sustainable footing. We know that the business environment has not been good enough for the UK’s steel industry, which is why we have already made substantial changes to secure a stronger future for it."
Liberty bosses said after the judge's decision that it would "continue to advance its bid for the business in collaboration with prospective debt and equity partners."
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Parliamentary documents also show that the Department for Business and Trade has provided the Official Receiver with a letter of comfort and a letter of indemnity which effectivley covers costs.
The Official Receiver will now carry out the proper performance and duties expected as the official receiver and liquidator of the company. This includes overseeing the winding-down of the company’s business and affairs and distributing assets of the company in the ordinary course as the official receiver's duties as liquidator.
But the governmnent is also covering the cost of investigating the cause of failure and identifying any asset recoveries against the company, current/former directors of the company, and any other parties.
The update added that: "it is not possible at this stage to accurately quantify the value of the overall funding requirement with relation to the letter of comfort and letter of indemnity" but costs are expected to be reported to Parliament when they are more accurately known.
Jones added: "The company has faced severe financial and operational difficulties since 2021. Liberty Speciality Steels had failed to file accounts for over six years — a failure that has led to a separate prosecution by Companies House of its parent company. I am sure that the official receiver will want to gain a better understanding of the company’s business and the conduct of its directors leading up to the liquidation. I also inform the House that the director of the company is currently under investigation by the Serious Fraud Office for suspected fraud, fraudulent trading and money laundering.
"In the case of Liberty Steel, the lack of transparency, the legal and financial risks and the complete absence of reliable corporate information meant we had no credible route to act before insolvency.
"The official receiver will look at what is true and what is not, because there have not been any accounts published for many years. They will establish what has happened. The Secretary of State has written to the Insolvency Service today to ask it to take special account of the Serious Fraud Office investigation, and to pass over any information it uncovers to the Serious Fraud Office, so that it can do its work."
The Rotherham site includes two electric arc furnaces (EAFs). The first casts at Aldwarke were produced in 1964. The N-Furnace, which was installed in 1993, is the larger of the two EAFs and was mothballed in 2015 at the height of the global steel crisis. Liberty reignited the N-Furnace in 2018 and the 800,000-tonne-a-year capacity furnace turns scrap metal into specialised steels for uses such as vehicle gearboxes or aircraft landing gear.
The UK company was hit by the collapse of Greensill, a specialist in invoice financing that operated with less regulation than the traditional banks. In its current state, Aldwarke is producing only minimal volumes of steel and with many employees still on furlough. "We want to turn that around," the minister added.
Images: Google Maps / Liberty Steel
A Parliamentary debate took place this week over the insolvency of the company following the approval by a judge of an application from creditors to place the business, previously part of Liberty Steel and GFG Alliance, into compulsory liquidation.
Speaking during the debate, Minister for Industry, Sarah Jones said: "We believe that this viable industry is languishing unnecessarily. The Government will provide the right support through interventions such as our energy reduction measures, and work with the official receiver.
"Multiple companies are interested and coming forward, and we need to establish how viable those offers are and what the best situation is. Of course, the official receiver must think of the best outcome for the creditors, but we take a close interest in that.
"I very much believe that the steelmaking sites in Rotherham, Stocksbridge, Brinsworth and Wednesbury have a future. I am keen to see them return to production, but that has to be achieved through private investment by an owner who can invest in the workforce and in the future of the business so that they put it on a long-term, sustainable footing. We know that the business environment has not been good enough for the UK’s steel industry, which is why we have already made substantial changes to secure a stronger future for it."
Liberty bosses said after the judge's decision that it would "continue to advance its bid for the business in collaboration with prospective debt and equity partners."
Advertisement
Parliamentary documents also show that the Department for Business and Trade has provided the Official Receiver with a letter of comfort and a letter of indemnity which effectivley covers costs.
The Official Receiver will now carry out the proper performance and duties expected as the official receiver and liquidator of the company. This includes overseeing the winding-down of the company’s business and affairs and distributing assets of the company in the ordinary course as the official receiver's duties as liquidator.
But the governmnent is also covering the cost of investigating the cause of failure and identifying any asset recoveries against the company, current/former directors of the company, and any other parties.
The update added that: "it is not possible at this stage to accurately quantify the value of the overall funding requirement with relation to the letter of comfort and letter of indemnity" but costs are expected to be reported to Parliament when they are more accurately known.
"In the case of Liberty Steel, the lack of transparency, the legal and financial risks and the complete absence of reliable corporate information meant we had no credible route to act before insolvency.
"The official receiver will look at what is true and what is not, because there have not been any accounts published for many years. They will establish what has happened. The Secretary of State has written to the Insolvency Service today to ask it to take special account of the Serious Fraud Office investigation, and to pass over any information it uncovers to the Serious Fraud Office, so that it can do its work."
The Rotherham site includes two electric arc furnaces (EAFs). The first casts at Aldwarke were produced in 1964. The N-Furnace, which was installed in 1993, is the larger of the two EAFs and was mothballed in 2015 at the height of the global steel crisis. Liberty reignited the N-Furnace in 2018 and the 800,000-tonne-a-year capacity furnace turns scrap metal into specialised steels for uses such as vehicle gearboxes or aircraft landing gear.
The UK company was hit by the collapse of Greensill, a specialist in invoice financing that operated with less regulation than the traditional banks. In its current state, Aldwarke is producing only minimal volumes of steel and with many employees still on furlough. "We want to turn that around," the minister added.
Images: Google Maps / Liberty Steel
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