Tata Steel has brought a claim against GFG Alliance in a UK commercial court over non-payments relating to the sale by Tata in 2017 of the Rotherham-based Speciality Steel plant to Liberty Steel.
A spokesperson for GFG Alliance declined to comment, while a Tata spokesperson tells Kallanish: “As this is now an active case, we are not making any comment”.
The move adds to the woes of Liberty Steel, which is facing challenges finding sufficient working capital financing to keep its global businesses in operation, following the collapse of major lender Greensill Capital.
Earlier this month the firm resumed partial production at its Rotherham plant following a period of intermittent operations since 12 March (see Kallanish passim). It also said then it had “agreed a few manufacturing campaigns in other units, including the Stocksbridge furnace, and the Stocksbridge, Thrybergh and Brinsworth rolling mills”.
Sanjeev Gupta, GFG Alliance executive chairman and chief executive, said earlier the group has received substantial interest from sources looking to refinance its debt, which is in the “many billions”. He also explained the group is in talks over a formal standstill agreement with Greensill’s administrators.
GFG said it would “vigorously” defend any legal action against Liberty Steel following the filing by Credit Suisse of an application through Citigroup in the UK insolvency court to wind up Liberty Commodities Ltd.
UK business secretary Kwasi Kwarteng said the UK government wants to see what new financing GFG can arrange before taking any action to support its UK plants. But officials are prepared to let Liberty Steel collapse into administration before stepping in.
Adam Smith Germany