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Local News

Liberty Steel sued ‘over missed payments for Rotherham plants’

today22/04/2021

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Tata Steel is suing Liberty Steel over alleged missed payments in a 2017 deal involving Rotherham‘s speciality steel plants, it has been reported.

Liberty Steel, owned by Sanjeev Gupta’s GFG Alliance group, bought Tata’s speciality steel business based in the South Yorkshire town for £100 million in 2017.

But Tata has told YorkshireLive it has now issued legal proceedings against Liberty Steel related to the 2017 deal.

While Tata declined to give further details, the Daily Telegraph reported the claim centres around alleged missed payments linked to the sale of the Rotherham plants.

It comes as Mr Gupta fights to save Liberty Steel following the collapse of its main financial backer Greensill Capital, which left the firm’s 3,000 jobs at risk. The company has 12 plants across the UK, including in Rotherham, Stocksbridge and Brinsworth.

A Tata Steel spokesman said: “As this is now an active case we are not making any comment.”

GFG Alliance also declined to comment on the case, but added in a statement that it is in “constructive discussions with a range of stakeholders” to provide short-term financial support to Liberty Steel while the company is “refinancing”.

“While that takes place we are undertaking significant self-help measures with the support of our customers and suppliers to ensure we manage cash carefully and continue to operate.

“We continue constructive discussions with a range of stakeholders on mechanisms that would provide the short term working capital support our UK businesses need in order to protect jobs and the supply chain while refinancing takes place.”

Last week Business Secretary Kwasi Kwarteng said it would have been irresponsible for the government to grant a £170 million bailout request fromto keep Liberty Steel afloat.

Business Secretary Kwasi Kwarteng explained the Government’s decision not to grant a £170 million bailout last week
(Image: Teesside Live)

He told Parliament’s Business Select Committee that GFG Alliance could not guarantee the bailout money would remain in GFG’s British operations.

“It’s not the most transparent organisation and they employ 35,000 people all over the world,” the Conservative minister said.

“So if the Gupta family asked the British government to give £170 million of taxpayers’ money, it is incumbent on ministers to be sure, to have some degree of surety, that the money will stay in the UK and won’t simply be dispersed across the Gupta Family Group’s other steel manufacturing assets across the world.

“As far as I could understand, we did not have these guarantees, it was a very opaque structure, and there was a reluctance to give the group the money.”

Written by: Rother Radio News


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