Sheffield steel: Liberty worker says huge plants 'stand idle' and in disrepair as it battles to survive
A worker has painted a bleak picture of Speciality Steel UK in Rotherham and Stocksbridge as it battles to stay afloat.
The employee claims most of the plants - part of Liberty Steel - have “stood idle” for months and are in “such a state of disrepair it will take investment to return them to operational standards.”
Meanwhile, creditors have not agreed to a new financial structure which would write off most of its debt.
A deal was supposed to have been finalised in court on February 17. Liberty was granted an extension to March 24 to allow more time for negotiations.
The worker added: “Without this agreement it is stated the firm would fall into receivership.”
Last month, wages were paid late for a second time after a delay caused uproar in October. And pension payments to Aviva have not been made since September.
The company employs hundreds at steelworks in Rotherham and Stocksbridge but many are on furlough due to a lack of orders.
The employee said: “Rotherham has little volume, although it has two electric arc furnaces capable of taking advantage of the current loss of blast furnace steel making capacity at Port Talbot and Scunthorpe and is in one of the strongest positions I’ve seen.
“However from an asset, personnel and financial position, I’ve never seen the company in such a poor condition having seen a few in my years at these steelworks.
“Rotherham currently sits idle having not made liquid steel since July, with equipment requiring repairs before it can return to service. Departments stand idle with no material to process for aerospace customers and many of the furnaces in a state of disrepair, unable to return to service until payment of suppliers.
“Not only are the assets in poor condition, but we continue to lose knowledge and experience from the business. This, along with asset condition, needs to be resolved before the business is in almost an irreversible position.”
On Wednesday, Liberty parent company GFG Alliance announced it had reached an agreement to settle all debts in connection with lender Greensill Capital ‘subject to legal agreement’.
If agreed, it would provide a platform to develop ‘sustainable financing for operations in Australia, the US, UK, Romania and Italy’, it added.
Greensill loaned money to GFG so it could pay suppliers, but collapsed in March 2021.
Sanjeev Gupta, GFG Alliance executive chairman, said: “With signs of improvements at our operations and some upturn in our markets, we are confident of being able to access longer-term financing to build on the significant investments we have already made in our international businesses, and to rebuild stakeholder confidence.”
Jeff Kabel, Liberty Steel’s chief transformation officer, confirmed the hearing to agree Speciality Steel UK’s restructuring plan was now expected in the week of March 24.
If agreed, it would clear the way to securing “fresh capital” enabling Liberty to rebuild and could see Rotherham’s furnace restart in coming months.
He added: “Stocksbridge has been busy fulfilling customer orders and Liberty Pipes Hartlepool is gearing up to start work on the Teesside carbon capture project at the turn of the month.
“It is clear evidence of the role Liberty can play in net zero projects - including Rotherham’s electric arc furnace which, if market conditions permit, we expect to restart in coming months.
“Liberty has the right assets in the right places with the right commercial plan. If the Government’s Steel Strategy consultation, into which we will have significant input, can achieve a competitive policy framework - especially eliminating the competitive disadvantage UK industry suffers from high energy prices and cut-price imports – then it will create a positive outlook for Rotherham’s electric arc furnace and other Liberty Steel UK steel plants.”
An SSUK spokesperson said individual and company pension contributions were held securely in a separate account.
They added: “We have constructively and urgently engaged with our pension provider to find a solution but our pension provider has not proved able to approve the transfer of funds while the legal process around SSUK’s restructuring plan is ongoing.
“If SSUK’s restructuring plan is sanctioned, we would expect our pension provider to be able to agree to accept pension contributions.”
Liberty workers are paid on the 24th of each month.