The UK’s ferrous market has been boosted by the news that Liberty Steel UK (LSUK) is injecting £50 million (EUR 59 million) to enable the restart of its core electric arc furnace at Rotherham in South Yorkshire.
The cash will safeguard 660 jobs at the plant, which has been closed since the spring. The move is part of a wider restructuring of GFG Alliance, Liberty’s owner, which was forced to seek funding when its key lender, Greensill Capital, collapsed.
A company statement said, ‘Production ramp up will commence in October 2021 with a plan to reach 50 000 tonnes per month as soon as possible. The restart of operations will enable colleagues to return to work, setting the platform for LSUK’s longer term refinancing and delivery of its plan to expand Rotherham’s capacity, creating a two million tonnes per annum green steel plant. Investment plans in Rotherham will boost production capacity, increase employment and introduce new products.’
The funding also supports the group’s plans to sell LSUK’s speciality steel division SSUK at Stocksbridge which makes narrow strip, performance steel. SSUK produces components for aerospace and energy applications and the intention is to run focussed production campaigns for key customers. ‘This will support business continuity, establish a stable operating environment and create an attractive asset,’ the group says.
Jeffrey Kabel, GFG’s chief transformation officer, said: ‘The injection of £50m of shareholder funds into LSUK is an important step in our restructuring and transformation. It will help to create sustainable value, ensure that Liberty has the ability to raise and deploy capital quickly in the UK and enable our businesses to demonstrate their potential and agree long-term debt restructuring.’
The news was welcomed by a spokesperson for the industry body UK Steel. ‘This is really good news for not only the company but those many thousands of workers and their families, the communities where those jobs a located and of course the whole of the UK steel sector.’
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