Posted on 12 Nov 2024
Liberty Steel has announced a restructuring plan for its UK-based Speciality Steel business.
The "transformative" restructuring, under Part 26A of the Companies Act 2006, is a major step in the company’s recovery and long-term growth strategy, Liberty says in a statement seen by Kallanish.
It adds SSUK has secured support for the plan from its major customers, while all creditors will be presented with a detailed proposal and will have the opportunity to vote on the plan.
Once implemented, SSUK will be better positioned to attract new capital and further expand its operations into strategic steel segments with environmentally conscious products.
Jeffrey Kabel, Liberty Steel group chief transformation officer, says: “After making significant progress to stabilise the business and refocus it on high value specialist products, we’re now addressing the debt position of the company to create a stronger speciality business going forward."
“We’re confident in winning the support of our creditors for the essential actions required to complete SSUK’s recovery,” he adds.
The company adds the proposed plan has no impact on SSUK employees.
The statement notes that SSUK’s participation in the aerospace, defence and energy sectors has helped mitigate steel industry challenges of high energy costs. The business has nevertheless been burdened by a highly leveraged balance sheet due to debt from Greensill Capital, which has hindered its viability.
It adds that the proposed restructuring plan is designed to significantly reduce SSUK’s debt, making it the most effective pathway to recover the business and avoid an insolvency process that would create uncertainty for its creditors and employees.
The backing from SSUK’s customers ensures that its order book remains stable throughout the restructuring period, while the compromise of creditors’ claims will provide the necessary time for the business to improve its cash position and begin repaying its debts, it says.
Source:Kallanish
