Liberty has record levels of credit insurance

Liberty House Group has seen no impact on its credit insurance provision from recent media coverage about its finances, the company said.

There has been no reduction in aggregate credit insurance coverage in recent weeks, it said. In fact, Liberty's coverage has risen by at least 500pc since Easter last year, a Liberty spokesman said. The rise reflects the group's precipitous growth.

Eight out of 12 underwriters "significantly" support the group with large levels of cover, the spokesman said. One underwriter approved €30mn ($34mn) in new cover for three suppliers today alone. Around 150 suppliers have credit insurance on the group.

"The logistics of growth means that, for a company such as Liberty, demand for cover will always be slightly larger than supply for cover," the spokesman said. "I genuinely have never seen a company benefit so much from credit insurers," he added.

Multiple suppliers to Liberty House Group's UK steel businesses have had credit insurance rescinded or reduced in recent months.

Two suppliers of the speciality steels business said they had credit insurance pulled totally recently and both were owed money. Euler Hermes was the insurer for one of the suppliers.

"It is our policy not to comment on individual clients or buyers," a spokesman for the credit insurer said.

Credit insurer Coface did not make an official comment. And the third-largest UK credit insurer, Atradius, did not return requests for comment.

A trader that had previously sold strip products to Liberty Precision Tube said he could not now get any credit insurance limit on the company at all. Nor could he get cover for Liberty Steel Newport (LSN).

Another trader had tried to structure imported material for the Hartlepool mill, but got "very limited cover" and walked away from the business.

Liberty had recently sent a letter to customers of LSN saying it was moving to 45 days payments terms for coil shipments, but customers then received a letter on 30 October saying all future orders would be payable 60 days from the date of invoice, effective from 1 November.

The company cited credit limits in its revision to payment terms.

In the US, suppliers have also had difficulty getting insurance to sell to the Georgetown mill. Liberty had been buying on a pre-payment basis in its first couple of months of melting in the US, but has moved to 30-day terms for some suppliers. Others are still operating on a pre-payment basis.

Hughes said an underwriter has an amount of cover they can provide, and cannot give more. So cover can sometimes be taken away from one supplier to another as there is a finite level of aggregate cover on any one company.