Sanjeev Gupta’s GFG Alliance has today replaced Liberty Steel UK’s boss as it continues to overhaul its embattled operations.
In a restructuring update, the company said that Roy Chowdhury would take over from Jon Ferriman as chief executive. It also said it was exploring the possible sale of Liberty Steel’s UK engineering business.
The moves are part of a wider reform of the business after the collapse of main financier Greensill went bust in March, leaving it scrambling for cash to appease its creditors.
Around 3,000 UK jobs are under threat as a resort of the funding shortfall, with the government having been urged to step in to protect Liberty’s 12 UK steelworks.
Greensill’s collapse triggered intense scrutiny of GFG’s business practices, prompting a Serious Fraud Office (SFO) probe and the firm to announce a new restructuring committee.
Under this committee’s newly announced plan, Liberty Steel will focus on its Australian and European operations, as well as a consolidated UK operation.
In the UK, the group has already announced the sale of speciality business in Stocksbridge, which makes alloys for the aerospace industry.
Now it said it was working with consultants Alvarez & Marsal to identify new owners for its engineering division, which owns four sites employing around 500 people in the Midlands.
GFG Alliance and the business’s key customers will continue to work together to provide adequate cash flow to keep the business solvent until the sale process is completed.
Ferriman, one of the country’s best known steel execs, took over at Liberty just 13 months ago. He previously held roles at Tata Steel UK, Corus and British Steel.
He will leave on 2 July. Chowdhury, who previously held senior management positions at Tata Group, Canadoli Asia, Liberty Steel Siam, will then take over.
A new management structure to support LSUK’s revised business plan will be announced
shortly, the firm added.
Today’s announcement comes after GFG last week said that it had agreed a six-week standstill agreement with Credit Suisse over its Australian steel business.
It said that this moratorium would allow it time to progress a new funding deal with US firm White Oak which would allow Liberty Primary Metals Australia to pay out its debts in full.
Commenting on the announcement, Gupta said: “Despite the difficult circumstances, GFG Alliance contains many high quality businesses which are performing strongly in record markets where customer demand and pricing are strong.
“By refocussing our businesses, we will protect more jobs and lay the foundations for future sustainable growth. The refinancing of the group, which is progressing well, brings closer the point of being able to honour our obligations to creditors.”