Liberty Steel hires team to accelerate overhaul after Greensill collapse

Liberty Steel has hired a team of specialist directors to its board to accelerate the group’s overhaul and refinancing after its backer Greensill Capital went bust.

The company said the four new directors will make up a new restructuring and transformation committee, which will be given independence to restructure Liberty and either fix or sell off under-performing divisions.

Concerns were raised over Liberty’s future after Greensill collapsed in March.

Greensill was the largest lender to steel magnate Sanjeev Gupta’s GFG Alliance – the parent company of Liberty Steel – and its failure put in jeopardy some 5,000 jobs in the UK.

Liberty has been forced to seek urgent financing, with the Government rejecting its appeal for a £170 million bailout in March.

Liberty said the director appointments mark a “step forward” in its response to the Greensill collapse.

It said: “This restructuring combined with the continuing strength in steel and iron ore markets will present a solid basis for the future of Liberty. ”

The firm added that the committee will work with the board and advisers to “negotiate an amicable solution with Greensill’s administrators and other stakeholders which protects value and provides the best outcome for all stakeholders”.

It gave assurances that cash is being managed prudently across the group and that “good progress” is being made on the refinancing.

Liberty announced separately on Wednesday that its Primary Metals Australia arm had agreed terms to refinance its exposure to Greensill.

GFG Alliance is talking to a number of financiers for various parts of its business to secure sustainable funding.

Liberty also said record steel prices were helping boost its performance since the start of the year.

The new four-strong committee will be led by Jeffery Stein as chief restructuring officer, with Jeff Kabel joining as chief transformation officer, Iain Hunter as chief governance officer and Deepak Sogani as Liberty’s chief financial officer – a post he will also hold on an interim basis at GFG Alliance.

Mr Stein will be based in the US, with Mr Kabel in London and Mr Hunter and Mr Sogani in Dubai.

Greensill filed for insolvency in March after failing to secure support through the Government’s Covid Corporate Financing Facility.

Ministers have since been facing questions over lobbying by David Cameron on Greensill’s behalf – including reportedly sending text messages to the Chancellor, Rishi Sunak.