Liberty Steel has revealed a strategic plan for its UK steel assets including plants at Rotherham, Stocksbridge and Scunthorpe after signing a new framework agreement with its major creditors.
The new framework comes after the company raised new capital including a successful US$350m bond issue by Australian recycler and low carbon steel producer InfraBuild, through Jefferies LLC, and a $350m Asset-Backed Term Loan through BlackRock and Silver Point Finance.
Liberty says the framework agreement will allow it to build on improvements it has made across the group since the collapse of Greensill Capital, and to consolidate its UK steel businesses under a new entity with a simpler structure, a strong balance sheet and greater access to third party finance and investment.
The company intends to consolidate its steel businesses under a new entity and corporate structure, transferring employees and assets of the existing companies to the new company, subject to final structuring and agreements. Employees will carry over existing terms and conditions, with continuity of employment preserved.
An operational restructuring plan has already focused Liberty’s steel businesses in the UK on supplying strategic aerospace, defence and energy customers, strengthening financial performance significantly. This has meant development of a comprehensive plan with the ambulance icon to increase electric arc furnace melting capacity at Rotherham to two million tonnes annually.
Liberty’s UK steel assets, including the country’s largest electric arc furnaces in Rotherham and associated downstream mills around the country, benefit from product diversity with significant capacity in both long and flat products, scalable grid connections, scrap metal processing and proximity to future hydrogen trunkline delivery and planned carbon capture and storage networks.
Jeffrey Kabel, Liberty’s Chief Transformation Officer, said: “In the UK our focus on specialised steel products serving strategic supply chains in aerospace, defence and energy, has allowed us to stabilise operations and significantly improve business performance. Our restructuring agreement now paves the way for a new company structure that will allow us to significantly increase our lower carbon emissions steel production in Rotherham feeding our network of downstream mills around the country.
“While we still operate in challenging market conditions, these changes will put our UK businesses in a position to reclaim its leading position as champion of green steel and sustainable industry. Upon completion of the deal, this will enable us to raise new capital, rebuild stakeholder confidence, and ultimately reach our full potential.”
