HM Revenue & Customs has withdrawn its petition to wind up Liberty Steel, as parent company GFG Alliance revealed how further funds have been injected, potentially saving thousands of jobs.
Significant progress with creditors has been flagged by the steel giant, which has interests across the UK and worldwide.
The group put in £50m of shareholder funding to restart the operations at Liberty Steel UK in October and a further “significant injection” of capital has let the company continue to work.
Jeffrey Kabel, chief transformation officer, said: “We’re pleased to report good further progress in our negotiations with creditors including UK’s HMRC - we are committed to repaying all creditors and this is an important step in enabling us to restructure and achieve long-term refinancing.
“Our core international businesses have continued to generate strong returns and achieve record production levels despite the sky-high energy costs facing energy-intensive industries across the UK and Europe.
“We will continue to progress our efforts to refocus and refinance our operations for the long-term.”
Liberty Steel has been under financial pressure since the collapse of backer Greensill Capital last year.
Around 3,000 jobs were understood to be at risk, with a headquarters and manufacturing plants in Rotherham, as well as Liberty Merchant Bar Scunthorpe, North Lincolnshire. Operations in Scotland, the North East, West Bromwich and South Wales complete the UK portfolio, with sites in the US and Australia also under Sanjeev Gupta’s control.
November saw sell-offs of aluminium divisions based in Coventry and Kidderminster.
Gupta, executive chairman of GFG Alliance, commented: “With refinancing initiatives well underway and our businesses performing well, this will be a formative year for our organisation as we work through our transformation plan.
“As our restructuring and refinancing programmes continue to progress positively we are also making operational improvements to further enhance the performance of our core businesses against a backdrop of robust demand for our products.”
Charlotte Childs, GMB’s national officer, said: “Retracting these winding up orders will be a massive comfort to our members at Liberty Steel - thousands of jobs will be saved in the short term, but we are far from out of the woods.
“GMB will now be seeking to continue constructive dialogue with GFG Alliance to ensure the impact of the financial restructuring and transformation package is felt in the right places.”
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