Latest news with #LibertySteel
BBC News
2 days ago
- Business
- BBC News
Rotherham's Liberty Steel mill 'basically derelict', worker says
A South Yorkshire steelworker who has seen his hours slashed due to the lack of work described the situation as "grim and soul destroying".Lee Bradshaw is one of many employees stood down from their shift for nearly a year due to the stalling of operations at Liberty Steel in Speciality Steels produces steel from scrap metal, but the company has been unable to buy the scrap needed because of financial problems and unpaid debts.A Liberty Steel spokesperson said continuing to pay staff on short-time working hours displayed its "deep commitment to supporting Speciality Steel despite sustained challenges in the UK steel sector". Mr Bradshaw, a team leader who started working in steel mills in 1985, said his current options were attending the melting shop where he was employed or staying at home for 80% of his salary."We've had short-time working since Covid," he said. "First it was the odd week, then the odd three weeks and since last July our furnaces haven't struck a light."On the days he goes to the melting shop, he said there was very little to do. "There's painting and sweeping and I take myself on a walk around the plant, but it's basically derelict," Mr Bradshaw said. "There's nothing worse than a steel mill that's not working, it's like walking around a museum."From what it was, hard manual work, to now be pushing a brush around and being told to do some weeding – that's not what people got a job there for, it's a waste of skills."Liberty Speciality Steels avoided a winding up order last month after lawyers representing the firm said talks with a third-party purchaser had been taking place.A final decision was adjourned until 16 July to allow time for the sale of the company to go through. A spokesperson for Liberty Steel said: "Even during extended periods of inactivity, we have continued to meet operating costs, pay wages, and sustain the business. "We will keep fighting to secure a long-term, sustainable future for Speciality Steel. "We are actively exploring every viable option protect the business as a going concern."Rotherham's Labour MP Sarah Champion described the situation as "absolutely unfathomable", adding: "Why is it that such a potentially profitable business isn't up and flourishing?"We hear snippets of information about Liberty, the workers are desperate and deserve information, but at the moment we're just in a fog." She added: "We've got a really good product, we know there's a market there. So why aren't we at full capacity right now?"Mr Bradshaw said he could choose to retire and start receiving his pension, but he believed the plant would reopen and wanted to be there when it did. Listen to highlights from South Yorkshire on BBC Sounds, catch up with the latest episode of Look North
The Guardian
27-05-2025
- Business
- The Guardian
Liberty Steel's South Yorkshire operations lost £340m in four years
Liberty Steel's operations in South Yorkshire lost £340m in four years, according to figures that shine a light on the difficulties facing a business on the brink of liquidation that employs 1,450 people. The company, owned by the metals magnate Sanjeev Gupta, is desperately searching for investors or lenders before a 16 July deadline, after London's high court granted it extra time last week. Its South Yorkshire subsidiary includes an electric arc furnace at Rotherham, plus steelworks in Stocksbridge and Brinsworth. Court documents suggest that previous efforts in 2022 to sell the latter two sites to an unnamed venture capital fund or a 'Chinese conglomerate' came to nothing. The Guardian revealed last week that the Rotherham plant and a similar operation in Motherwell, Scotland, have not produced any steel for about nine months because of a lack of funds to buy vital materials, with staff on furlough on 85% of their salaries. The depth of the crisis has prompted Community, the biggest union representing steelworkers at the plants, to write to Gupta, a Dubai resident, asking for assurances of his ability to continue to run his businesses in the UK. If Gupta is unable to do so, the union 'will be forced to demand that you step aside', according to a letter seen by the Guardian from the general secretary, Roy Rickhuss. The UK steel industry is under severe pressure, with 2024 production slumping to the lowest since the 1930s. The government passed emergency legislation in April to take control of British Steel's two blast furnaces at Scunthorpe to prevent up to 2,700 jobs being lost within days. Another crisis is brewing at Liberty Steel, with some industry figures expecting the government to step in to ensure the plants keep running if they fall into liquidation – although it is not thought that the government will give financial support to Gupta's companies. Liberty Steel companies, grouped under Gupta's informal GFG Alliance, have not filed accounts since 2021, when the group was plunged into turmoil by the collapse of the lender Greensill Capital. Investors who backed Greensill are now seeking to recover $4.5bn (£3.32bn) lent to Gupta's businesses. Gupta has in recent months lost control of a series of his businesses around the world, including Liberty Steel's eastern European companies, the Whyalla steelworks in South Australia, and his metals trading business in the UK. At the same time, the UK's Serious Fraud Office is investigating suspected fraud, fraudulent trading and money laundering related to GFG's financing with Greensill. Gupta's ownership of the South Yorkshire operation – formally known as Speciality Steel UK (SSUK) – is also under threat, after a supplier issued a winding-up petition over unpaid debts, and a company plan to write off debts related to Greensill failed. That process gave a rare insight into the finances of Liberty Steel. Documents disclosed in court showed deep losses since March 2020 at SSUK, albeit with a slight improvement up to March 2024 as the company focused on higher-value aerospace and defence products for companies including Rolls-Royce and Airbus. However, the hiatus at the Rotherham site since last July means losses are likely to have risen again. 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 In December, the company submitted to the court that it was insolvent, and would face compulsory liquidation if the restructuring deal failed. It is 'considered likely that a 'special manager' would be appointed' by the government's official receiver, the company said, as happened in 2019 when British Steel fell into liquidation. Jeffrey Kabel, Liberty Steel's chief transformation officer, said that despite 'substantial challenges, particularly for our colleagues at the Speciality Steel plants and their families, our commitment remains unwavering'. He said the business faced 'persistently difficult operating conditions in the UK steel sector', but Gupta had given 'over £200m in personal funding' to pay salaries during inactivity. 'We are actively exploring every viable option to avoid an uncontrolled liquidation and protect the business as a going concern,' Kabel added. Workers have lost confidence in Gupta, Community's leader said in his letter. 'Our members no longer believe what the company says,' Rickhuss wrote. 'We have had enough, and we will not accept you kicking the can down the road so that the businesses can limp on to nowhere.' Employees at the Rotherham and Stocksbridge sites who spoke to the Guardian said the mental health of workers and their families had been damaged by the long-running uncertainty over the future of the plant. Uncertainty across the group over the past nine months had prompted many workers to leave.
The Guardian
21-05-2025
- Business
- The Guardian
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.
Yahoo
21-05-2025
- Business
- Yahoo
Steel firm insolvency on hold over possible buyer
A South Yorkshire steel company has avoided insolvency for the moment after a potential buyer was found, the High Court has heard. Speciality Steel UK (SSUK), part of the Liberty Steel Group founded by Sanjeev Gupta, employs 1,450 people and has plants in Rotherham and Sheffield. Lawyers representing SSUK said at a hearing on Wednesday that "urgent meetings" had been taking place with a "third party purchaser". Insolvency and Companies Court judge Sebastian Prentis adjourned a winding up petition for eight weeks until 16 July to allow time for the sale of the company to go through. Following the hearing, Jeffrey Kabel, Liberty Steel chief transformation officer, said the court's decision was a "positive development". The company would use the time to "finalise options, including a sale of the business" while continuing its debt restructuring plans, Mr Kabel said. "We remain committed to finding the right solution that preserves EAF [electric arc furnace] steelmaking in the UK, a vital national asset serving strategic supply chains," he said. "We recognise that change is essential to set the business on a positive trajectory and provide certainty for our creditors, employees and stakeholders." Mr Kabel said the company would use the time afforded by the adjournment to engage in "intensive discussions" to achieve an outcome which "best serves the strategic interests of the business". He added that the company had been involved in "complex debt restructuring" since the collapse of Greensill Capital in 2021, the principal financial backer of Liberty Steel's owner GFG Alliance. Roy Rickhuss, general secretary of steelworkers' union Community, said on Tuesday that workers had run out of patience and called for Mr Gupta to "invest in the business or step aside". Mr Rickhuss said: "Failed restructuring plans and broken promises from the company have become a familiar demoralising pattern, and things simply can't go on as they are. "New, responsible ownership is needed to give the business the brighter future it needs and deserves, and that can only be achieved with a decisive change at the top." Marie Tidball, Labour MP for Penistone and Stocksbridge, backed these calls, saying the Stocksbridge site needed "new, competent ownership". A spokesperson for the Department for Business and Trade said it would "closely monitor" developments, but that it was ultimately for the company to manage commercial decisions. Listen to highlights from South Yorkshire on BBC Sounds, catch up with the latest episode of Look North. Liberty Steel plants in Rotherham and Sheffield under threat Firm threatened with court action over debt claim Liberty Steel restructuring puts 440 jobs at risk
BBC News
21-05-2025
- Business
- BBC News
South Yorkshire steel firm insolvency on hold over possible buyer
A South Yorkshire steel company has avoided insolvency for the moment after a potential buyer was found, the High Court has Steel UK (SSUK), part of the Liberty Steel Group founded by Sanjeev Gupta, employs 1,450 people and has plants in Rotherham and representing SSUK said at a hearing on Wednesday that "urgent meetings" had been taking place with a "third party purchaser".Insolvency and Companies Court judge Sebastian Prentis adjourned a winding up petition for eight weeks until 16 July to allow time for the sale of the company to go through. Following the hearing, Jeffrey Kabel, Liberty Steel chief transformation officer, said the court's decision was a "positive development".The company would use the time to "finalise options, including a sale of the business" while continuing its debt restructuring plans, Mr Kabel said."We remain committed to finding the right solution that preserves EAF [electric arc furnace] steelmaking in the UK, a vital national asset serving strategic supply chains," he said."We recognise that change is essential to set the business on a positive trajectory and provide certainty for our creditors, employees and stakeholders."Mr Kabel said the company would use the time afforded by the adjournment to engage in "intensive discussions" to achieve an outcome which "best serves the strategic interests of the business".He added that the company had been involved in "complex debt restructuring" since the collapse of Greensill Capital in 2021, the principal financial backer of Liberty Steel's owner GFG Alliance. Roy Rickhuss, general secretary of steelworkers' union Community, said on Tuesday that workers had run out of patience and called for Mr Gupta to "invest in the business or step aside".Mr Rickhuss said: "Failed restructuring plans and broken promises from the company have become a familiar demoralising pattern, and things simply can't go on as they are."New, responsible ownership is needed to give the business the brighter future it needs and deserves, and that can only be achieved with a decisive change at the top."Marie Tidball, Labour MP for Penistone and Stocksbridge, backed these calls, saying the Stocksbridge site needed "new, competent ownership".A spokesperson for the Department for Business and Trade said it would "closely monitor" developments, but that it was ultimately for the company to manage commercial decisions. Listen to highlights from South Yorkshire on BBC Sounds, catch up with the latest episode of Look North.
