Liberty Steel will reduce production at its UK Rotherham, South Yorkshire site due to its challenge with funding and has informed around 180 workers that they would be placed on furlough On Mar 11.
The announcement comes within a week of the company indicating such measures as it grapples with funding-related challenges after its key financier Greensill Capital filed for bankruptcy. The latest move would mean that the steelmaker has reduced its 660 strong workforce at the South Yorkshire plant by 27pc. The workers put on furlough will be paid 80pc of their wages under the government’s COVID-19 support system, according to media reports. Others have been informed of possible layoff until Apr 14.
Liberty Steel has made a similar announcement at the Stockbridge plant, which has 750 workers, though the details of the furloughs at that plant have not been made public yet. The company has also not disclosed the impact these measures will have on its overall steel production.
Sanjeev Gupta called on all steel entities to manage cash tightly and reduce their reliance on GFG Alliance resources as he works on a refinance deal after Greensill Capital collapsed. Greensill underwrote GFG’s expansion investments including those made for Liberty Steel, the UK’s largest steelmaker, weighing on a future leveraged invoice scheme. Unions began discussions with GFG last week.
Liberty Steel operates 11 steel sites in the UK. GFG acquired the sites at Rotherham, Stocksbridge, and Brinsworth in South Yorkshire and Wednesbury in the West Midlands in 2017.