Liberty Specialty Steel may go bankrupt due to the failure of the recovery plan

British specialty steelmaker Liberty Specialty Steel UK may face bankruptcy proceedings after all Greensill’s creditors and more than three-quarters of other creditors voted against the company’s restructuring plan. This was reported by Argus.Media, citing sources in the company.

The restructuring plan was considered at a hearing on April 30. Now the final decision is to be made by the court at a sanction hearing scheduled for May 15-16. If the judge finds the creditors’ position unreasonable, he can legally reject their vote. However, sources attending the hearing believe that the court is likely to take the creditors’ position into account, meaning the plan could potentially fail and the company could become insolvent.

Despite the opposition, the restructuring plan was supported by HMRC, Together Commercial Finance and the creditors of GFG Alliance, which includes Liberty Steel.

“We had a constructive meeting, and now the chairman of the meeting, Begbies Traynor, is analyzing the feedback received to move to the next stage,” said a GFG Alliance spokesperson.

Earlier, Liberty Specialty Steel was already under threat of liquidation due to creditor claims amid financial difficulties and unstable production. The company operates two electric arc furnaces, producing specialty and engineering steel, as well as high value-added products in Stockbridge, particularly for the aerospace sector.

The government has not yet commented on the possibility of intervention, despite the new law on supporting the steel industry. According to the sources, the government is not planning to actively use the new powers to rescue Liberty Specialty Steel.

In November 2024, Liberty Steel announced a plan to restructure its Specialty Steel UK business. The proposed plan was aimed at significantly reducing the company’s debt and increasing its ability to meet future demand.