Liberty Steel plans to sell off its ‘non core’ business in South Yorkshire
Liberty Steel Group, which is part of Sanjeev Gupta’s Gupta Family Group Alliance (GFG), has today announced it will look to sell its aerospace and special alloys steel business in Stocksbridge, South Yorkshire which employs 760 people.
The troubled business which has been facing an uncertain future since the collapse of Greensill Capital and it was recently sued over unpaid debts by its competitor Tata Steel, says that following meetings at the weekend in Dubai, Gupta and his newly-formed restructuring and transformation committee are in “advanced discussions” about the future.
The statement notes that the business is making progress with Credit Suisse Asset Management (CS) to agree a framework to resolve GFG Alliance’s remaining exposure with CS.
This includes identifying a solution which will allow Liberty to complete the restructuring and refinancing of its UK operations, which the company says will protect thousands of jobs.
Liberty says it has also already begun the formal sale process of Liberty Aluminium Technologies and Liberty Pressing Solutions, working with the main customers of these plants to find a sustainable home for these businesses, which are also “non-core” to Liberty’s vision of decarbonised Greensteel.
However the statement notes: “As part of this restructuring Liberty will look to sell its aerospace and special alloys steel business in Stocksbridge, which while being a unique, high quality business servicing marquee customers in aerospace, auto and other highly engineered applications, is not core to the Greensteel vision of Liberty.
“This sale will allow Liberty to focus on developing its Rotherham plant including its electric arc furnaces into a competitive 2 million tonnes recycled Greensteel plant, one of the largest in Europe.
“The plant will make use of some of the millions of tons of steel scrap currently exported by the UK to make more of the quality steel needed in the UK, which is currently being imported.”
A formal sale process for Stocksbridge and its downstream plants, the narrow strip mill at Brinsworth and Performance Steels at West Bromwich will be launched shortly.
The sale of the Stocksbridge assets looks to bring an end to what has been a turbulent period for the business, which was acquired by Gupta from Tata Steel in 2017 as part of a £100m deal, which led to the businessman being known as the “Saviour of Steel”.
However since the collapse of Greensill the business has been looking for additional options, with the Government refusing Gupta’s request for £170m bail out. While more recently it was announced that The Serious Fraud Office (SFO) is investigating Gupta Family Group Alliance (GFG) in a probe relating to “suspected fraud, fraudulent trading and money laundering”.
The investigation will also look at its financing arrangements with Greensill Capital UK which fell into administration in March.
Liberty’s operations in South Yorkshire are not the only ones impacted, with the steel company and CS reportedly close to a formal standstill agreement on its Liberty Primary Metals Australia business while refinancing is completed that will repay CS out in full.
GFG’s advisers Alvarez & Marsal will run both processes.
Dan Jarvis, Sheffield City Region Mayor said: “The news that Stocksbridge Speciality Steels is to be sold off will be a cause for great anxiety among its workers, and for the suppliers and wider community it helps to support.
“Their future, and the future of the steel industry in South Yorkshire, depends on finding a buyer willing to invest for the long-term. Both this site and the wider sector have enormous potential, but the government must act to help secure it.
“That includes being prepared to help provide finance to bridge any transition period until a new buyer is found – but also doing much more to ensure British-made speciality steel like that produced at Stocksbridge is used for the myriad of defence and infrastructure projects that need it.
“I will do everything I can as the Mayor of this region to support these efforts, and I met with Kwasi Kwarteng last week to raise our concerns and make the case for intervention. I ask the government as well as potential buyers to work with regional and local government in South Yorkshire and our Local Enterprise Partnership to find a long-term solution.
“British steel has a bright future as a zero-carbon, high quality, internationally competitive product. It would be a travesty for South Yorkshire and for the whole country if that potential was lost through lack of action.”
