Liberty Steel has cancelled the restructuring plan for its Speciality Steel business in the UK.
Liberty axed the plan as it was not going to receive sufficient creditor support to approve it, sources at the company said. Greensill creditors, and a majority of other plan creditors, had voiced their opposition to the restructuring in recent court proceedings.
A sanction hearing to approve or reject the plan had been scheduled for 15-16 May, but that has now been cancelled as a result.
The winding up petition by major creditor Harsco is scheduled to be heard on 21 May, so there is a risk the company could now be wound up if not placed into administration. In a note to creditors obtained by Argus, Liberty said it will "consult with UK government" and other stakeholders ahead of the petition.
"The court's ability to sanction the [restructuring] plan depended on finalisation of an agreement with creditors," a company spokesperson told Argus. "This has not proved possible in an acceptable timeframe and so Liberty decided to withdraw the plan ahead of the sanction hearing on 15 May and will now quickly consider alternative options." The company remains "committed to doing all it can" to maintain the business, he said.
The Speciality business has operated at a tiny fraction of its nameplate capacity in recent years, along with all of Liberty's operations in the UK, some of which have been technically mothballed already.
Some sources have suggested the government could take control of Speciality Steel, as it has with British Steel, citing synergies between the two plants.
