Barnsley’s MPs backed calls for government support to be provided to Liberty Steel owner Gupta Family Group (GFG) Alliance, which in May announced plans to sell its Stocksbridge site after main financial backer Greensill Capital collapsed into administration two months earlier.
GFG owner Sanjeev Gupta had a bail-out request for £170m rejected by the government in March due to the company’s accounting procedures - which a meeting of the Business, Energy and Industrial Strategy (BEIS) Committee in July found involved ‘risky’ loans from Greensill based on unconfirmed future transactions.
But due to refinancing debts at its Australian steel and mining sites, GFG Alliance has freed up the cash to be put into its UK plants at Stocksbridge and Rotherham where production has almost halted.
The two sites employ around 1,000 workers in total who are all currently on 80 per cent pay after the furlough scheme ended.
The Stocksbridge business, Speciality Steels, is still being prepared for sale - but the firm said the money will allow it to run ‘focused production campaigns for key customers’ which will make it more attractive for potential investors. Stocksbridge receives raw steel from the Rotherham plant, with production restarting there meaning its future is secured for the near future.
“This will support business continuity, establish a stable operating environment and create an attractive asset,” said a spokesperson.
The aerospace industry is a major customer of the plant and the distress in that industry, a knock-on effect of the Covid-19 pandemic, saw demand for its steel plummet.
Production restarting will allow the firm - currently facing an investigation by the Serious Fraud Office for its financing arrangements - to look at restructuring its debts across its global operations.
Roy Rickhuss, general secretary of Community, the steelworkers’ union, said: “Huge challenges remain but the workforce is ready to get back to making the best steels money can buy, and the £50 million injection will enable us to restart steelmaking.
“Other European countries have already acted, and Britain’s steelworkers want to know why our politicians are sitting on their hands.”
Penistone and Stocksbridge MP Miriam Cates has met with Secretary of State for Business, Andrea Leadsom, and steel minister Nadhim Zahawi to ‘explore ways in which the government can help’.
She has also written to Secretary of State for Business, Kwasi Kwarteng, urging him to intervene to help find a suitable buyer for the site.
She said: “I am hopeful that this new investment will make Stocksbridge a more attractive asset to potential buyers, and I am having regular discussions with management, unions, and the Government to support this process.
“With the added stability created by this additional money, the time is now right to move towards a sale of the Speciality Steels business and to provide the Stocksbridge site and its workforce with the investment and security they need to continue producing high value, high quality, specialist steel.”