Liberty Speciality Steel in the UK could potentially face insolvency after all Greensill creditors and a number of "other" creditors voted against its restructuring plan, sources at the company told Argus.
There was a restructuring plan hearing held on 30 April, where all Greensill creditors and over three quarters of "other" creditors opposed the restructuring, which will now be voted on by a judge at the sanction hearing on 15-16 May. Should the judge deem those creditors positions' unreasonable, their vote can technically be overruled.
But sources that attended the hearings suggest they will likely be taken into account, meaning the restructuring plan could fail, and the company potentially face insolvency shortly afterwards. However, UK HMRC, Together Commercial Finance and GFG creditors voted in favour of the plan — Liberty Steel is part of the GFG Alliance.
"We had a productive meeting and the meeting chair, from Begbies Traynor, is now reviewing and analysing the feedback we received so we can proceed to the next stage in the process", a Gupta Family Group Alliance spokesperson said.
Prior to the plan Speciality Steel was subject to a winding up petition by several creditors, having produced intermittently in recent years under mounting cash pressures.
Asked about the potential for the government stepping in under its newly passed Steel (Special Measures) bill, a department for business and trade spokesperson refused to comment, but sources suggest the government has no plans to use the powers more widely at present. A GFG spokesperson previously declined to comment on the idea of government intervention in Speciality Steel.
Speciality Steel has two electric arc furnaces, the T Furnace for Speciality Steels and N Furnace for Engineering Steels. Via its Stocksbridge High Value Manufacturing business it can conduct vacuum induction melting, vacuum arc remelting and supplies high-profile sectors such as aerospace. The company's Rotherham site has the Thyrbergh bar mill, a 750,000t/yr facility that could complement British Steel's longs range. Liberty's plate mills in Scotland, which are unaffected by the Speciality Restructuring, have previously been supplied with British Steel slab.
