Zoe Conway & Simon Jack present an urgent plea from Liberty Steel to save its operations in the Rotherham and Sheffield areas from imminent collapse. Facing a court order that could force the closure of its speciality steel business over unpaid debts, putting 1,450 jobs in jeopardy, the company is seeking an adjournment to continue discussions with creditors. Despite the grim situation, Liberty Steel remains dedicated to preserving its speciality steel business.
Sources within the government have made it clear that they are not willing to intervene to bail out Liberty Steel or its subsidiaries to settle outstanding debts. However, if the courts mandate insolvency, the government may reconsider its stance. Creditors, like Harsco Metals, are pushing for liquidation to recoup the owed funds by selling off Liberty’s assets. One creditor voiced frustration with the situation, highlighting the uncertainty and financial strain caused by the lack of payment from Liberty Steel.
Owned by GFG Alliance, Liberty Steel has been struggling financially, particularly after the collapse of its main lender, Greensill Capital, in 2021. The business has been grappling with constraints in securing third-party finance in the wake of this event. Sarah Champion, the Labour MP for Rotherham, expressed deep concern over the critical role of the Liberty plant in producing speciality steel for industries like aerospace, defense, and Formula One. Meanwhile, steelworkers’ union Community’s general secretary, Roy Rickhuss, emphasized the need for responsible ownership to ensure the plant’s stability, urging Sanjeev Gupta of Liberty Steel to either invest in the business or step aside.
Comparisons are drawn to the recent government intervention at British Steel in Scunthorpe, where control was assumed to guarantee the plant’s operations. While the government remains vigilant about developments at Liberty Steel, the company’s fate lies in its own hands. With soaring energy costs and challenges posed by cheap imports, the restructuring sought by Liberty Steel is crucial to its survival. Despite previous efforts to reduce liabilities through restructuring, the failure to reach an agreement with creditors has left the company facing dire consequences
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