LIBERTY STEEL received a shot in the arm as the UK’s tax department has withdrawn liquidation petitions against its subsidiaries.
HM Revenue and Customs had moved the court last year seeking to wind up the company’s four subsidiaries – Speciality Steel UK, Liberty Pipes, Liberty Performance Steels and Liberty Merchant Bar subsidiaries.
Liberty, along with other firms of GFG Alliance led by British Indian tycoon Sanjeev Gupta, faced a severe financial crunch following the collapse of the group’s main financial backer Greensill Capital.
The liquidation proposal had put some 3,000 jobs at stake when the British economy was recovering from the pandemic shocks.
“Following positive discussions with HMRC, winding up petitions have been withdrawn,” GFG said in a statement on Monday (7), without giving specifics of the process.
“Constructive discussions” have continued with its existing creditors to repay liabilities, it said, adding that negotiations were ongoing with new lenders for “longer-term refinancing of the business”.
Gupta said recapitalisation of his group companies is in progress while operational improvements are being made.
“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”, he said.
“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…”
Since the collapse last year of Greensill, which specialised in short-term corporate loans via a complex and opaque business model, GFG has been scrambling to restructure and cut costs to survive.
It had announced the sale of two car parts factories in Britain and the closure of a third.
But it also injected £50 million into Liberty’s Rotherham plant last year to restart production, saving 660 jobs.
GFG, which employs 35,000 throughout the world, has faced investigation for fraud and money laundering in its business activities, including in connection with the collapse of Greensill.
