The owner of Liberty Steel has pledged to restart its Rotherham and Stocksbridge plants this month, saving around 1,000 jobs. The move comes after Sanjeev Gupta’s conglomerate, GFG Alliance, said it had refinanced debts at its Australian steel and mining business. The group has reportedly repaid about a third of its total debt of Liberty Primary Metals Australia, which includes a mining and steel business in Whyalla and a calming at Tahmoor, using cash flow from its reviving business.
They plan to gradually repay the rest of the debt by June 2023 to key lenders Credit Suisse and the collapsed Greensill Capital. The debt was previously expected to be repaid next year. GFG was desperate in its search for new funds to plug a gap since the collapse of its key lender Greensill Capital in March. It faces a Serious Fraud Office investigation into those financing arrangements. Chief restructuring officer for Liberty Steel, Jeffrey S Stein said. “The funding we are injecting to Liberty Steel UK puts it in a strong position for business transformation and debt restructuring.” He said the group’s efforts on global refinancing would now turn to its eastern European operation “where a significant number of new lenders are expressing interest in refinancing our steel assets.”
Roy Rickhuss, general secretary of Community, the steelworkers’ union said, “This news is well overdue but it’s an important step in the right direction and demonstrates that GFG can raise funds for the UK.” He said, “The government must play their part and act now to protect our industry from the consequences of soaring energy prices. Other European countries have already acted, and Britain’s steelworkers want to know why our politicians are sitting on their hands. Brexit was supposed to make it easier for the government to back British industry and British jobs but we’re just seeing the same old hand-wringing and excuses for doing nothing.”
GFG had hoped to secure new funding for its Australian business via a deal with San Francisco-based White Oak Global Advisors, however, it is understood that arrangement could not be finalized in time. Instead, a revival at the Australian operation, where underlying profits rose to £391m this year, as revenues rose almost 29 per cent.
Liberty said the deal in Australia also freed up £50m in cash that would fund restarting the core electric arc furnace in Rotherham. The 1,000 workers at the two Yorkshire plants are currently on 80 per cent pay, funded by Liberty, after the UK government’s furlough scheme ended after 30 September.