Liberty Steel official calls SSUK’s compulsory liquidation ‘irrational’
Liberty Steel’s chief transformation officer has described Speciality Steel UK (SSUK) being pushed into compulsory liquidation by the high court in London as “irrational”, Kallanish learns.
Jeffrey Kabel says in a statement that the decision “especially when we have support from the world’s largest asset manager to resume operations and facilitate creditor recovery is irrational.”
The company will now enter administration. It has been placed under the control of special managers appointed by the government’s official receiver.
SSUK previously announced a restructuring in November 2024 and had a winding up petition adjourned in the same month. In May this year, another hearing was adjourned amid a potential sale. The company employs around 1,450 people within the speciality business.
Kabel adds that the plan Liberty’s parent, GFG Alliance, presented to the court “would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight.”
“Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution,” he says.
Liberty says it has pursued all options to make SSUK viable, including efficiency improvements, reorganisations and customer support. There have been several attempts to find a buyer for the business and intensive negotiations with creditors to restructure debt liabilities. The company notes that its shareholder has invested nearly £200 million ($268m).
The company says it will now continue to advance its bid for the business in collaboration with prospective debt and equity partners and will present its plan to the official receiver.
“GFG continues to believe it has the ideas, management expertise and commitment to lead SSUK into the future and attract major investment. GFG’s other significant business interests in the UK remain unaffected,” it adds.
In a separate statement, industry association UK Steel says the company provides vital steelmaking capacity in aerospace, defence and power generation. The association welcomes the government’s move.
UK Steel director general Gareth Stace says: “UK Steel welcomes the government’s recognition of the importance of the Liberty Speciality Steel assets and hopes that a new owner is found quickly and can inject the investment and working capital required to return production volumes to previous levels.”
“The assets produce high quality, specialist steels that serve high value markets. The low production levels of recent years have left significant holes in the domestic supply chain that have been filled by imports. We hope to see these holes quickly filled by UK-made steel,” he adds.
Carrie Bone UK
The UK government is preparing to take over its third-largest steel plant
According to a court announcement, new administrators have been appointed to take control of Speciality Steels UK (SSUK), a Liberty Steel-owned facility in South Yorkshire. The company, which produces steel using scrap metal, has faced ongoing uncertainty due to its mounting unpaid debts, putting it at risk of liquidation.
This development comes after the government earlier this year took control of the British Steel plant in Scunthorpe to prevent the closure of the country’s last remaining primary steel production facility. SSUK hosts the UK’s largest electric arc furnace, known for its greater energy efficiency and expected to play a key role in the steel industry’s energy transition.
However, the company has long struggled with financial difficulties. The collapse of Liberty Steel’s main lending institution and growing unpaid debts have made it impossible for the company to purchase the scrap metal needed for steel production.
The fate of SSUK now rests with a judge in the High Court. Lawyers for Sanjeev Gupta, chairman of Liberty Steel’s owner GFG Alliance, warned that a potential liquidation order could spell the end of steel production at the plant. Gupta’s legal team has requested a postponement to allow the administrative process to be completed and argued this would avoid the need for direct government intervention.
Creditors’ lawyers, however, submitted a letter from the government to the court, providing assurances that the steelworks could be taken over if necessary. Creditors, who are owed hundreds of millions of pounds, have petitioned the court to force the company into liquidation so its assets can be sold to repay debts.
GFG Alliance, which operates in the energy, trade, and steel sectors and employs thousands across the UK, has been under scrutiny since the 2021 collapse of its main lender, Greensill Capital. Sources close to Gupta have confirmed ongoing talks with investment giant Blackrock to provide new funding to acquire the company through a managed process known as a “pre-pack” administration.
While the government supports policies to back the steel sector, it has repeatedly rejected direct financial aid requests from Sanjeev Gupta. As a result, two difficult options lie ahead: allowing Gupta to retain control of the company, which would likely see much of the creditors’ debts written off but avoid costs to the government; or the government taking over the loss-making steelworks to ensure creditors are paid, a process that could be both costly and lengthy.
In a statement, the government emphasized: “We will continue to closely monitor developments regarding Liberty Steel, including public hearings. We support the appointment of an Official Receiver to take necessary action should the company enter compulsory liquidation.”
Liberty Steel responded, saying, “Our commercial solution, supported by major private equity, will deliver the best outcome for the company, employees, and all stakeholders, without costing UK taxpayers or causing unnecessary uncertainty.”
Luxembourg government eyes Liberty Dudelange acquisition, site repurposing
The Luxembourg government has submitted an acquisition offer to the court-appointed liquidator for bankrupt galvanizer and service centre Liberty Steel Dudelange. It aims to repurpose the site for another use and not resume steel operations.
According to Luxembourg’s Ministry of Economy, following nearly three years of production stoppage, the site presents a strategic opportunity for redevelopment. The objective, according to a ministry note obtained by Kallanish, is to optimise land use and repurpose the facility to support industrial renewal and drive economic growth.
“If this offer is accepted, the Ministry of the Economy will proceed with the development of the land with the aim of establishing new industrial activities and promoting the creation of high value-added jobs. The government will also consider the possibility of dedicating part of the site to defence-related projects,” the note says.
No other buyers have emerged for the Dudelange site, nor for Liberty Steel’s Liège facility. Despite ongoing efforts to identify potential investors, both sites remain without viable acquisition prospects, largely due to structural challenges in the European steel market and restrictive trade conditions.
In May, the sales process for the Dudelange plant was suspended after rumoured bidder Tosyali reportedly withdrew its interest. A recent visit by another potential buyer reportedly took place at the Dudelange site, though the interested party is also said to be based outside the EU.
The EU quota system is a major obstacle to any acquisition of both the Dudelange and Liège sites. The fundamental issue lies in its restricted ability to import hot rolled coil feedstock from outside the EU, which significantly undermines the site’s competitiveness and operational viability.
Natalia Capra France
Luxembourg government moves to acquire insolvent ex-Liberty Dudelange plant
“In the context of the bankruptcy of Liberty Steel Dudelange, the Government Council has decided to submit an offer to the trustee to acquire the site,” the Ministry of Economy said in a press release.
“After almost three years of inactivity, the site can be redeveloped in a way that maximizes the use of available space and finally gives it a new purpose to contribute to economic development,” the ministry added.
In 2019, Liberty Steel acquired the Dudelange site, along with several other European steel assets, from ArcelorMittal. Almost all of those acquisitions have faced insolvency or closure in recent years.
The plant in Dudelange is capable of producing around 1 million tonnes per year of galvanized products from both electro-galvanizing and hot-dipped galvanizing lines, according to Fastmarkets’ information. There are two hot-dipped galvanizing lines with combined capacity for 620,000 tpy and two electro galvanizing lines with combined capacity for 360,000 tpy, according to Liberty Steel’s website.
There are 185 workers employed at the Dudelange plant, which lies in the south of Luxembourg, which itself is between France, Belgium and Germany.
The asset was part of Liberty Steel Belgium, along with Liberty Liège, which comprises the Flémalle and Tilleur production sites in Belgium, each producing cold-rolled coil, hot-dipped galvanized coil and tinplate.
In December 2024, the Dudelange plant was declared insolvent and a receiver was appointed, while the Belgian assets entered a process of liquidation.
Liberty Steel’s attempts to organize a reacquisition faltered. Then, in February this year, Turkey’s Tosyali Steel submitted an offer for the potential acquisition of the Dudelange plant, but Fastmarkets understands that the deal did not progress beyond that initial stage.
“If this offer is accepted, the Ministry of Economy will develop the land with a view to developing new industrial activities and promoting the creation of high-value jobs. The government will also examine the possibility of dedicating part of the site to defense-related projects,” the Ministry of Economy said.
Because no other potential buyer has emerged, industry sources familiar with the matter said that the chances were high that the Dudelange site would be nationalized.
Galvanized coil is mainly used in the automotive and construction industries. But these products are also used in the military industry, mainly for their corrosion resistance and durability in extreme conditions. Applications include structural elements, vehicle components and essential parts such as chains and anchors for landing craft.
Tosyali emerges for Liberty Steel Dudelange facility
The bankrupt Liberty Steel Dudelange facility’s receiver has communicated to trade unions that a decision has been reached on the buyer for the plant, informed sources tell Kallanish.
The prospective buyer is a Turkish steelmaking group that shares the same objective as the Luxembourg government – a commitment to finalise the transaction promptly to facilitate the resumption of production, according to sources.
The buyer could be Tosyali, which was reported last month to be seeking to acquire a European steel producer, citing the challenges faced by EU-based mills reliant on coal-based production. The company’s strategy involves supplying semi-finished products to downstream manufacturers rather than competing directly with final products in the EU market.
Tosyali did not respond to request for comment before deadline on Friday.
The Luxembourg government aims to maximise financial recovery to address Liberty’s outstanding debt, with the government itself among the creditors due to various employee-related expenses incurred by the previous owner. The government maintains ownership of the land and is expected to grant new concession rights to the prospective owner.
The asset will be sold instead of being transferred without compensation. The facility is said to be in good condition, as some personnel have worked to ensure maintenance. The equipment remains up-to-date and production tests have been successfully executed.
Theoretically, after all paperwork is signed, the buyer will be able to quickly resume production thanks to minimal bureaucracy. The selection made by the receiver must undergo validation by the judge responsible for overseeing the sales process. A source indicates this process may require a few days to complete. Following the state’s approval of the judge’s and receiver’s ruling, the facility will be transferred.
Dudelange currently has approximately 140 employees following a reduction in staff. The facility has remained inactive for more than two years, with the exception of a production test conducted in July 2024.
The Luxembourg commerce tribunal declared the Dudelange facility bankrupt last December (see Kallanish 4 December 2024). In addition to Dudelange, Liberty plans to divest its Magona facility in Italy and its Belgium-based Liege plant. The three businesses combined possess rolling capacity exceeding 2.5 million tonnes/year.
The Magona facility is currently operational following the procurement of hot rolled coil feedstock, while Liege is said to be on the verge of bankruptcy.
Natalia Capra France , Elina Virchenko UAE
Authorities speed up Dudelange sale
Multiple companies have expressed interest in Liberty Steel’s Dudelange facility, according to informed sources speaking to Kallanish.
The primary goal of the government and the receiver is to find a potential buyer. A source suggests the Luxembourg government estimates the Dudelange plant’s bankruptcy procedure will take approximately three months. The receiver, Olivier Wagner, will negotiate a potential price in collaboration with the presiding judge overseeing the case, with assistance from the government. The latter holds ownership of the land and is expected to grant new concession rights to the prospective owner.
According to rumours, Italian service centre Eusider has shown interest in acquiring Dudelange, alongside other prospective buyers. Eusider and Liberty declined to comment.
Last month, the OGBL and LCGB unions urged the Luxembourg government and the European Commission to take immediate action aimed at securing the long-term viability of the site.
Since Liberty Steel did not fit the requirements set by the Luxembourg state to be eligible for temporary layoffs, the government has not supported Dudelange until now. As a result, Liberty Steel took on the responsibility of covering all wages and costs. In October and November, the group did not fulfil its obligation to pay salaries to its workforce.
Last week, the Luxembourg commerce tribunal declared the Dudelange facility bankrupt. The plant has experienced a period of inactivity spanning approximately two years. A union source indicates that the 147 workers at Dudelange had been anticipating the tribunal’s decision.
Another union source indicates the state will now assume responsibility for salaries. In addition to Dudelange and its Belgium-based Liege plant, Liberty plans to divest its Magona facility in Italy. The businesses combined possess rolling capacity exceeding 2.5 million tonnes/year.
Natalia Capra France
Liberty Steel officially bankrupt in Dudelange
The bankruptcy of Liberty Steel’s Dudelange site was declared by the Luxembourg Commercial Court. 147 jobs are at stake.
Neither the local management nor the company’s lawyers were present at the Luxembourg Commercial Court at 9am on Friday 29 November. However, Liberty Liège-Dudelange and its Luxembourg site were declared bankrupt after the management admitted that it was in suspension of payments. Olivier Wagner was appointed receiver in front of a few journalists and the LCGB union’s deputy general secretary, Robert Fornieri, who had made the trip.
“The most urgent matter is the employees, who are entitled to their back pay for October and November,” commented Wagner as he left the court. “They will be entitled to their severance pay under the Labour Code, which corresponds to the month of the bankruptcy, the subsequent month, i.e., December, and half the notice period to which they would have been entitled in the event of conventional dismissal.”
A recovery to avoid the real state of bankruptcy
“Everything will be checked by me under the supervision of the supervisory judge, the files will then be sent to the employment administration. We must wait for the date of verification of the claims, which is set in the judgment for January 17, for it to be ratified and sent to Adem,” continued the new receiver. But since employees cannot wait several weeks without pay, the unions will try to find an accelerated procedure to release certain amounts.
“Contacts have already been made with the ministries. For us, the most important thing is the situation of the 147 employees and their salaries, there is still a long time to go before a single euro arrives in the employees’ bank accounts. The ministry of labour must help us, as it promised us this week”, said Fornieri.
“We will have to react very quickly and quickly get in touch with the receiver. We could perhaps be heading towards an unfinished bankruptcy if buyers act in the meantime to transfer the employment contracts to new ones. Because if we really enter a state of bankruptcy, employment contracts and activity cease, and this is a danger for the installation, especially in winter. This would make any possible recovery difficult,” added the deputy general secretary of the LCGB.
Written by Ioanna Schimizzi
Source: paperjam.lu
Liberty’s Ostrava sale garners mostly local interest
The sale of Liberty Steel’s Czech Ostrava iron and steel works has garnered interest from a number of parties, mostly local but including Indian company Jindal Steel, a delegation from which showed up at the mill in May, industry sources said June 18.
Other potential buyers included Trinecke Zelezarny, another major steel producer in the Czech Republic with a capacity of 2.5 million-2.6 million mt/year, Czech industrial holding CE Industries (CEI) known in the steel industry for having provided Czech third-largest steel producer Vitkovice Steel with tolling financing, and Czech energy company Sev.en Group, the sources said.
Liberty Steel declined to discuss the sales process and the above-named entities were not available for comment.
Given the ongoing risks and uncertainties, Liberty Steel last week announced a sale of Ostrava and its judicial reorganization under the Insolvency Act.
It had worked on several restructuring plans for Ostrava, including a mid- to long-term transition to electric arc furnace technology.
In April, Sanjeev Gupta, head of GFG Alliance, an umbrella group which Liberty Steel is part of, met Czech finance and industry ministers but the latter found the plans “weak” and “unconvincing” with no breakthrough achieved on the mill’s restart, sources said.
Steel production at Ostrava was halted in the fourth quarter of 2023 when Liberty Steel in October idled blast furnace No. 3, the last remaining operational BF at its Ostrava steelworks, citing poor demand in Europe as the main reason.
Some downstream mills continued rolling, using up previously acquired semi-finished steel stock. Ostrava’s blast furnace No. 2 was idled in July 2022 for repairs and an upgrade but has never been restarted.
Ostrava’s restructuring was hampered by external factors, primarily a further deterioration of market conditions in Europe, an indefinite delay in the allocation of emissions allowances to the business from Czech authorities, Liberty Steel said, adding Ostrava was filing for a judicial reorganization which will provide the time and protection to undertake its sale.
The sale decision was in the best interests of Ostrava’s creditors, employees and customers, said Liberty, which intends to maintain the few assets which cover their own costs and support employees in applying for the state’s Wage Guarantee Scheme.
The Ostrava plant is the Czech Republic’s biggest steel producer capable of making up to 2 million mt/year at full steam. Liberty Steel acquired it from ArcelorMittal in July 2019. After years of underinvestment, it says it injected Eur143 million ($153 million) in the plant and led to its best performance in a few years in 2021-22.
In 2021, Ostrava produced a five-year high of liquid steel at 2.28 million mt with the plant’s two blast furnaces producing 1.93 million mt of hot metal during the year, but last year, its steel production declined to 1 million mt, according to local media reports.
Katya Bouckley
Liberty Steel hints at preparing Hungary’s Dunaferr for green transition after acquisition
“The iron and steel works [of Dunaferr] has been saved, but now needs to be repaired and prepared for a sustainable long-term future,” according to a letter from Liberty Steel’s European chairman Ajay Aggarwal and its chief investment officer Sandip Biswas.
Just over a month ago, UK-registered Liberty Steel won the tender for Dunaferr. However, the sale is not yet completed, as the European Commission has yet to approve the acquisition, making the liquidator exercise ownership rights and take strategic decisions.
A spokesperson for Liberty Steel declined to comment on the content.
The letter mentions the understanding between the liquidator and Dunaferr’s management in relation to the challenging European market conditions and specifically high levels of foreign steel imports into the EU, high energy prices, and additional costs in meeting EU carbon emission standards, and the necessity to pause steel production as these conditions persist.
The liquidator has therefore agreed to Liberty’s suggestion to temporarily and for an unspecified period stop steel smelting and take offline blast furnace No. 2 — the last operational of the two BFs at the plant — and reduce the operation of the coke plant to a technological minimum, according to the letter. However, the rolling mill continues to process slab stocks, the letter added.
Liberty Steel since the end of 2022, when Dunaferr was in a bad state amid its major facilities shut down, has worked closely with the liquidator, helping the restart of Dunaferr’s blast furnaces and coke ovens, in addition to steel production and rolling mills.
Previously, Liberty Steel informed the market of the green transition in the works for its other major Eastern European mill and Romania’s largest steelmaker Liberty Galati. Just over a year ago, Liberty said it was about to hold a tender to select a supplier of hybrid electric arc furnace technology needed to produce low-carbon steel at Galati, but this was never completed.
Liberty Steel to idle Dunaferr blast furnace
Liberty Steel is idling the remaining working blast furnace – no.2 – at Dunaferr because production costs are not economically feasible amid the current low steel prices, informed sources tell Kallanish.
The global steelmaking group acquired the insolvent Hungarian steelworks in an auction last month (see Kallanish passim).
In a letter to Dunaferr employees last week, management wrote: “The mill has been saved, but it should be put in order, to be prepared for a sustainable and green future to provide working places for those working at the mill. We are now working on the plan to switch to the production of GREENSTEEL, and as soon as approval from EU authorities is given, the work can begin.”
The letter also says Liberty will continue to pay the salaries of employees, while it develops retraining programmes, according to its legal obligations. The furnace shutdown is expected to last three months.
Liberty declined to comment.
BF2 was restarted in February after being idled last year amid Dunaferr’s well-publicised financial troubles.
According to reports last month following Liberty’s Dunaferr acquisition, investment exceeding $100 million will be required to regain the steelworks’ environmental protection permits necessary for operation.
In 2020, the last year for which Dunaferr published production data, it recorded crude steel production of 1.18 million tonnes, despite widely reported operational problems in the second half of the year. This was down 19% on-year. The firm’s BF1 remains idle since last summer.
Adam Smith Poland