Manufacturer reveals strategic steel plan after signing creditor framework deal

Liberty Steel Group has unveiled a strategic plan for its UK steel assets after signing a new framework agreement with its major creditors.

It follows Liberty raising fresh capital, including a $350m bond issue by its InfraBuild business, Australia’s leading recycling and low carbon steel producer, through Jefferies LLC and a $350m Asset-Backed Term Loan through BlackRock and Silver Point Finance.

Liberty Steel’s UK operations have since October 2021 been supported by £210m loss funding from the  group’s shareholder to maintain employment, operations, and growth potential.

Liberty is part of tycoon Sanjeev Gupta’s GFG Alliance and has operations across the country including in Rotherham, Stocksbridge, Scunthorpe, and West Bromwich,

It says execution of the framework agreement will allow the business to build on improvements it has made across the group since the collapse of Greensill Capital and to consolidate its UK steel businesses under a new entity with a simpler structure, a strong balance sheet and greater access to third party investment.  

It is proposed the existing companies will transfer their assets and employees to the new company, subject to final structuring and agreements.

Employees will carry over existing terms and conditions, with continuity of employment preserved. Liberty says there will be no impact on operations, suppliers or customers.  

Jeffrey Kabel, group chief transformation officer, said: “Following our successful capital raising in 2023 we are now in a position to execute this new updated creditor framework.  

“Completion of the deal will enable our businesses to build on the operational, commercial and governance improvements we’ve made across the group over the past three years. 

“In the UK our focus on specialised steel products serving strategic supply chains in aerospace, defence and energy, has allowed us to stabilise operations and significantly improve business performance.

“Our restructuring agreement now paves the way for a new company structure that will allow us to significantly increase our lower carbon emissions steel production in Rotherham feeding our network of downstream mills around the country.  

“While we still operate in challenging market conditions, these changes will put our UK businesses in a position to reclaim its leading position as champion of green steel and sustainable industry.

“Upon completion of the deal, this will enable us to raise new capital, rebuild stakeholder confidence, and ultimately reach our full potential.”