London (Parliament Politics Magazine) – Sanjeev Gupta, CEO and chairman of the GFG Alliance, plans to go to court to gain approval to restructure the majority of Liberty Steel’s remaining operations in the UK.
A private company, Liberty Steel, owned by Mr Gupta, will initiate a plan on Monday to restructure its Speciality Steel division (SSUK) in the UK, aiming to cut its debts.
The plan of restructuring is ready to be implemented under part 26A of the 2006 Companies Act and they hired insolvency practitioner Bebgies Traynor to look after this.
Sources observing this process have stated that the restructuring will have no effect on the 1500 employees working in Liberty Steel’s Speciality Steel division (SSUK) in the UK.
The restructuring plan for Liberty Steel will need the consent of 75% of its creditors, who will be compromised under the plan.
One source claims that the decision is likely to spark criticism coming after rounds of restructuring and cost-cutting across Sanjeev Gupat’s conglomerate.
Three years ago in 2021, he asked the government for £170m in emergency help but his request was declined.
In response to a question asked by Sky News, the chief transformation officer of Liberty Steel group, Jeffrey Kabel, said: “After making significant progress to stabilise the business and refocus it on high value specialist products, we’re now addressing the debt position of the company to create a stronger speciality business going forward”.
He added, “Our plan, which is backed by customers, is the best route forward for all stakeholders and we’re confident in winning the support of our creditors for the essential actions required to complete SSUK’s recovery”.
An unnamed source very close to the company revealed that implementation of the restructuring proposal is expected to help the company secure new financing and enhance its reach into quick-growing sectors of the industry.
Speciality Steel UK (SSUK) operates across several locations including sites in Rotherham, South Yorkshire, and Bolton, Lancashire.
The SSUK division manufactures highly highly engineered steel products used in industries such as aerospace, automotive, and oil and gas.
In a statement given to Sky News, by assistant general secretary of the trade union Community, Alasdair McDiarmid, said “We acknowledge Liberty’s plan to reduce debts and welcome the company’s commitment there will be no impact on employees.
He stated, “Liberty’s Speciality Steel businesses are strategically important for our country and their long-term future must be secured”.
“As well as supporting thousands of highly skilled well-paid jobs, they produce world leading green steels for Britain’s defence, aerospace and energy industries.
“All stakeholders must play their part to protect jobs and safeguard these priceless national assets”, he added.
They are doing the restructuring of SSUK at such a time when Chinese-owned British Steel is also negotiating with the government over a possible aid package.
Whitehall sources have dismissed claims that the company could get up to £2bn from the government fund as “completely inaccurate” information.
Tata Steel, the biggest company in the industry has secured £500m from the government to electrify steel production at its Port Talbot plant.
As part of the deal, thousands of steelworkers are facing redundancy.