Liberty Steel has not produced anything at two key plants since July 2024
Liberty Steel has produced nothing at two of its key UK plants since July, in a sign of the deep financial difficulties for Britain's third-biggest steelmaker as it looks for rescue funding.
The plants at Rotherham in South Yorkshire and Motherwell in Scotland have not produced any steel for about nine months because of lack of funds to buy vital materials, with workers on furlough on 85% of their salaries for the duration, according to workers who spoke to the Guardian.
Steel companies have been struggling for several years. UK steel production fell in 2024 to its lowest since the 1930s, and the last month the government effectively took over the British Steel blast furnaces at Scunthorpe, amid fears over 2,700 job losses and the end of primary steel making in the UK.
Liberty Steel is ultimately owned by Sanjeev Gupta, whose GFG Alliance metals empire is under severe financial pressure across the world after a debt-fuelled expansion spree. Gupta has been battling for control of metals companies in the UK and Australia against creditors led by the administrators for Greensill Capital, a lender that collapsed in 2021. Greensill had lent Gupta's companies about $5bn (£3.7bn).
The financial turmoil has left Liberty Steel's UK plants unable to access cash needed to run their operations, with one creditor seeking to recover money via a winding up petition at London's high court on Wednesday.
The Liberty subsidiary that runs the site at Rotherham, called Speciality Steel UK (SSUK), was granted until 16 July to hold talks with unnamed potential investors, in a desperate effort to avoid a liquidation that would put 1,450 jobs at risk.
The Labour government would face pressure to step in if the Rotherham plant, seen as an important part of British steel-making capabilities, faced bankruptcy.
SSUK supplies aerospace and defence companies including Rolls-Royce and Airbus, and operates an electric arc furnace at Rotherham, a related works nearby at Stocksbridge, and two other sites. That business owes creditors £619m, including £289m to related GFG companies and £289m to Greensill's administrators. Greensill's administrators, Grant Thornton, earlier this month opposed a restructuring plan that would have cut the amount owed to it significantly, leaving Liberty scrambling to find other emergency funding.
Daniel Judd, a barrister representing the company, told the court that SSUK was 'urgently considering its options' after the failure of the restructuring plan, including talks to try to secure an unnamed 'third-party investor'.
'Urgent meetings have been taking place to advance this,' he told the court.
The group confirmed it is considering a sale of its SSUKbusiness in South Yorkshire, saying that 'change is essential'.
Jeffrey Kabel, Liberty's chief transformation officer, said: 'Today's adjournment is a positive development, allowing us the necessary time to finalise options including a sale of the business while we continue to pursue our debt restructuring efforts.
'We remain committed to finding the right solution that preserves electric arc furnace steel making in the UK, a vital national asset serving strategic supply chains.'
Kabel said Greensill's collapse was 'restricting its access to capital', alongside 'longstanding competitiveness challenges dating back decades' for British steelmakers.
Alun Davies, national secretary for steel at Community, a union representing workers, said the extra time 'essentially amounts to the company kicking the can down the road' and 'will achieve very little' other than uncertainty and distress for the workforce.
'Things cannot go on as they are,' he said. 'Sanjeev Gupta must demonstrate now that he is willing to invest in the business in a meaningful way, or he should step aside and make way for a new, responsible owner.'
The UK's Serious Fraud Office has been investigating GFG Alliance and Greensill over 'suspected fraud, fraudulent trading and money laundering' since 2021. Government figures have long been wary of offering financial support to Gupta's companies in light of the investigation and concerns over whether money would be used to prop up businesses in other countries.
Before July, Rotherham was running month-on, month-off for as long as five years, relying mainly on customers who could make pre-payments to buy materials needed. Rotherham runs the UK's largest electric arc furnace, melting scrap steel to make specialised automotive and aerospace parts.
The Scottish site is run by another subsidiary, Liberty Steel Dalzell. Workers at the plant are concerned that the failure to restart production could result in the Royal Navy considering other options for steel for new warships. The fleet solid support ships are due to be made with steel from British Steel in Scunthorpe, which would be rolled into plate at Dalzell, and then fabricated at Harland & Wolff in Belfast.
It is understood that the company is confident the Dalzell plant will be able to restart work soon.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
24 minutes ago
- Telegraph
Kemi Badenoch to give speech on the ECHR
Kemi Badenoch is set to use a major speech to declare she is 'increasingly of the view' that the UK should withdraw from the European Convention on Human Rights. The leader of the Conservative Party is expected to set out a plan to launch a commission into whether Britain should quit the treaty. The ECHR was a dividing issue in last year's Conservative leadership election, with Mrs Badenoch's rival Robert Jenrick championing the idea that Britain should pull out. Critics of the treaty want to leave it because it has been used to frustrate attempts to deport migrants from Britain. Mrs Badenoch is expected to say that she is 'increasingly of the view that we will need to leave, because I am yet to see a clear and coherent route to change within our current legal structures'. 'I have always been clear that if our national interest means that we need to leave the ECHR, we will leave,' the Conservative leader will say. She will add: 'But I say that not because of any particular obsession with international law or with our treaty arrangements. I say that because for me, the most important thing is making our country safer, richer and fairer.'
The Guardian
24 minutes ago
- The Guardian
Hedge fund orders London-based analysts back to office five days a week
Man Group has ordered its London-based analysts to return temporarily to the office five days a week, as the world's biggest listed hedge fund seeks to recover from a period of poor performance sparked by Donald Trump's tariff war. Quantitative analysts working at Man AHL, the company's computer-run fund that aims to identify and follow momentum in markets, have been told they are expected to be in its offices daily until the end of July as part of an 'all hands on deck' project. The edict applies to about 150 staff in London, just under 10% of the overall group's 1,700 global employees, the Financial Times reported. 'Man AHL has asked its staff in London to work in the office five days a week for a three-month period to support an 'all hands on deck' cross-team research project,' the company said. 'While these cross-team initiatives are infrequent, experience has shown that a period of highly focused, in-person collaboration allows significant research progress to be made in a relatively short amount of time.' The company, which has been a champion of flexible working arrangements including working from home, said that its 'broader agile working policy remains unchanged'. Employees tend to be in the office three days a week, on average. However, this varies by role. Trump's destabilising tariff war has resulted in significant volatility in global markets, which has made it difficult for computer-based funds such as AHL to predict market trends. The company's most recent financial statement showed that the start of Trump's trade war in April wiped out all of the assets under management gains made by Man Group in the first quarter. Its holdings were up $4bn in the first three months of the year but plummeted by $5.6bn in the first two weeks of April. The AHL Alpha programme, Man's institutional trend-following strategy, has lost 10% so far this year. Man Group's share price is down more than 30% over the past year. Man Group is the latest major financial services company to revisit its flexible working policies. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Last month, BlackRock, the world's biggest asset management company, told its approximately 1,000 managing directors globally that they were expected to work from the office full time. The New York-based company last told staff in 2023 that they had to go into the office at least four days a week. Earlier this year, JP Morgan Chase summoned all its workers back into the office. Jamie Dimon, the head of the bank, has long been a proponent of restoring pre-pandemic working patterns. Barclays also hardened its stance on remote working earlier this year, saying that all staff should work from the office at least three days a week, up from a previous requirement of two days.
The Independent
24 minutes ago
- The Independent
Reform's Richard Tice doubles down on call for burqa ban debate after chairman quits
Reform's deputy leader has doubled down on calls for a debate on whether burqas should be banned in Britain after a furious row over the issue saw the party's chairman quit. Zia Yusuf resigned on Thursday after describing a call from the party's newest MP to ban the burqa as 'dumb'. Speaking as he entered the count for the Hamilton, Larkhall and Stonehouse Holyrood by-election, Richard Tice said MPs should 'discuss' a potential ban. 'Let's have a discussion about these things, all these important issues, as opposed to not discussing anything, smearing and labelling,' he said. Pressed on his personal view amid chaotic scenes, Mr Tice said there should be a 'national debate'. And, asked if Mr Yusuf's resignation implied the party was racist, the Boston and Skegness MP said: 'With the greatest of respect, that's nonsense.' It came after the new Runcorn and Helsby MP Sarch Pochin used her first Prime Minister's Questions question to call on Sir Keir to ban burqas 'in the interest of public safety'. She said: 'Given the prime minister's desire to strengthen strategic alignment with our European neighbours, will he, in the interest of public safety, follow the lead of France, Belgium, Denmark and others and ban the burqa?' Sir Keir welcomed Ms Pochin to the Commons, but said 'I am not going to follow her down that line'. A Reform spokesman later clarified that banning burqas was not party policy, sparking calls from the far-right for Mr Farage to adopt the proposals. Later, Mr Yusuf said it was 'dumb for a party to ask the prime minister if they would do something the party itself wouldn't do'. He quit the party on Thursday saying 'I no longer believe working to get a Reform government elected is a good use of my time, and hereby resign the office'. Asked on Wednesday night about Ms Pochin's comments on the burqa, party leader Nigel Farage also said he would welcome a broader debate about face coverings in public. He told GB News: 'I think this debate actually goes beyond the burqa… I was in Aberdeen Monday, there was a mob there to meet me, an organisation called Antifa, and half of them had complete face coverings on so they would be unidentifiable. 'I don't think face coverings in public places make sense, and I think we do deserve debate about that, which I see the burqa as being a part.' Denying his party was 'in chaos', Mr Tice paid tribute to the outgoing former chairman. 'As Nigel's said, as I've said, we're very sad that Zia has resigned,' he said. 'He's worked incredibly hard, he's been instrumental in driving the party forward. ' One of the reasons that this result could be really close – who knows which way it will go – is because of the success of what Zia has achieved.' He added: 'It's very sad, politics is difficult, it's time-consuming, but he's worked incredibly hard.'
