News: Talks continue over Speciality Steel sale
Talks remain underway with the preferred bidder for Speciality Steel UK (SSUK), the Minister of State for Industry has confirmed.
Last August, a judge approved an application from creditors to place SSUK, previously part of Liberty Steel and GFG Alliance, into compulsory liquidation. Teneo Financial Advisory Limited were brought in as Special Managers whilst a formal sale process takes place.
The government committed £50m to keep the sites in Rotherham and Stocksbridge open throughout the bidding process. Multiple companies came forward with the government confident a buyer can be found.
In April, the official receiver announced a period of exclusivity with a preferred bidder. Marking the next stage of a future sale agreement, the announcement said that talks were "expected to last approximately five weeks, during which the preferred bidder will progress their bid."
Rotherham MP, Sarah Champion has received confirmation from Chris McDonald MP that those talks remain underway. Champion added: "He made very clear that he does not want the works to close and he is keen for the site to start production at the earliest possible time."
The Financial Times is reporting that Blastr is the preferred bidder.
The steel industry has been a hot topic in Westminster this month with a recent debate on the Steel Industry (Nationalisation) Bill where Sarah Champion used the opportunity to highlight the importance of steel to Rotherham.
The MP said: "Rotherham is a steel town. It has seen the consequences of past Governments’ neglect up close. Speciality Steel, which is based in Rotherham—and Stocksbridge—should be a crown jewel in our economy, but it has been allowed to lurch from crisis to crisis, choked of investment and left at the mercy of unscrupulous ownership, unfair competition and a lack of vision. The plants currently stand still, shuttered amid the fallout of Liberty’s collapse. The workers are furloughed and uncertain about what their futures hold.
"My concern is not limited to Speciality Steel. Steel in Rotherham is at the centre of our local economy, and the crisis has had a substantial impact up and down the supply chain. The Minister’s ambition for steel’s renaissance could also be a rebirth for local businesses and local communities, but that requires investment, foresight and commitment. The Government’s steel strategy sets out a strategic vision for the industry and, crucially, delivers real and profound change for the sector as a whole. With £2.5 billion of investment in the sector and an ambitious but achievable target of 50% of the steel used in Britain to be produced here, the strategy is a blueprint for a revitalised domestic steel industry; it is one that has been roundly welcomed by the sector."
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In the same debate Chris McDonald MP, said: "That business [SSUK] shows the power of a productive Government intervention, working carefully with industry, because the Government have underwritten the costs of the official receiver to allow a proper sale of the business. The official receiver is in exclusive discussions with a potential buyer, and there was a high level of interest in the business from the market.
"As we look forward to the potential sale of the business, we can see the vital role that the Government have played in recognising that steel undertakings are complex, that it can be difficult and can take time to assess them, and that they require high levels of working capital. That contrasts significantly with Governments in the past, who allowed steel companies to close simply by not allowing that process to continue."
In a subsequent debate on steel tariffs, the minister said: "We all understand the position with Speciality Steel UK in Stocksbridge and Rotherham. That business is going through administration, and it was impossible for it to compete in the UK while there was an influx of subsidised steel.
"This Government have decided that we want to have a full aerospace supply chain, including our own speciality steels production. That is a different choice from the one that the previous Government made when they were approached by industry, offering to co-invest in that site and keep it open. They rebuffed all those responses, because their view was, “Leave it to the market, let the steel plants close.” We are making a different choice."
Images: SSUK
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Last August, a judge approved an application from creditors to place SSUK, previously part of Liberty Steel and GFG Alliance, into compulsory liquidation. Teneo Financial Advisory Limited were brought in as Special Managers whilst a formal sale process takes place.
The government committed £50m to keep the sites in Rotherham and Stocksbridge open throughout the bidding process. Multiple companies came forward with the government confident a buyer can be found.
In April, the official receiver announced a period of exclusivity with a preferred bidder. Marking the next stage of a future sale agreement, the announcement said that talks were "expected to last approximately five weeks, during which the preferred bidder will progress their bid."
Rotherham MP, Sarah Champion has received confirmation from Chris McDonald MP that those talks remain underway. Champion added: "He made very clear that he does not want the works to close and he is keen for the site to start production at the earliest possible time."
The Financial Times is reporting that Blastr is the preferred bidder.
The steel industry has been a hot topic in Westminster this month with a recent debate on the Steel Industry (Nationalisation) Bill where Sarah Champion used the opportunity to highlight the importance of steel to Rotherham.
The MP said: "Rotherham is a steel town. It has seen the consequences of past Governments’ neglect up close. Speciality Steel, which is based in Rotherham—and Stocksbridge—should be a crown jewel in our economy, but it has been allowed to lurch from crisis to crisis, choked of investment and left at the mercy of unscrupulous ownership, unfair competition and a lack of vision. The plants currently stand still, shuttered amid the fallout of Liberty’s collapse. The workers are furloughed and uncertain about what their futures hold.
"My concern is not limited to Speciality Steel. Steel in Rotherham is at the centre of our local economy, and the crisis has had a substantial impact up and down the supply chain. The Minister’s ambition for steel’s renaissance could also be a rebirth for local businesses and local communities, but that requires investment, foresight and commitment. The Government’s steel strategy sets out a strategic vision for the industry and, crucially, delivers real and profound change for the sector as a whole. With £2.5 billion of investment in the sector and an ambitious but achievable target of 50% of the steel used in Britain to be produced here, the strategy is a blueprint for a revitalised domestic steel industry; it is one that has been roundly welcomed by the sector."
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In the same debate Chris McDonald MP, said: "That business [SSUK] shows the power of a productive Government intervention, working carefully with industry, because the Government have underwritten the costs of the official receiver to allow a proper sale of the business. The official receiver is in exclusive discussions with a potential buyer, and there was a high level of interest in the business from the market.
"As we look forward to the potential sale of the business, we can see the vital role that the Government have played in recognising that steel undertakings are complex, that it can be difficult and can take time to assess them, and that they require high levels of working capital. That contrasts significantly with Governments in the past, who allowed steel companies to close simply by not allowing that process to continue."
In a subsequent debate on steel tariffs, the minister said: "We all understand the position with Speciality Steel UK in Stocksbridge and Rotherham. That business is going through administration, and it was impossible for it to compete in the UK while there was an influx of subsidised steel.
"This Government have decided that we want to have a full aerospace supply chain, including our own speciality steels production. That is a different choice from the one that the previous Government made when they were approached by industry, offering to co-invest in that site and keep it open. They rebuffed all those responses, because their view was, “Leave it to the market, let the steel plants close.” We are making a different choice."
Images: SSUK
