Reports emerging from the United Kingdom have claimed that Liberty Steel is being sued by its rival Tata Steels over claims of unpaid debts, according to a report. According to a report published by the Daily Telegraph, the case and the claim is linked to the payments from Liberty’s flagship £100m takeover of Tata’s speciality steels business in 2017 that have remained unpaid.
The collapse of the main backer of the Liberty Steel owner GFG Alliance – Greensill, in early March has put the steel owner under severe financial constraints.
The acquisition of India’s Tata’s speciality steels business by GFG Alliance in 2017 made its owner Sanjeev Gupta one of the biggest steel magnates of the UK.
The Telegraph said that proceedings against Liberty Speciality Steels, Liberty House Group PTE and Speciality Steel UK have been launched in court by Tata.
“This is an active court case and as a result we are not making any further comment,” said a spokesman of Tata.
The collapse of Greensill had made the future of Liberty very unstable. The collapse also gave rise of speculations about the future of the business as well as the future of thousands of jobs. There have been several calls made to the UK government to intervene in the matter and save the steel company.
Even though the UK government has promised to preserve Liberty in some form, the UK Business Secretary Kwasi Kwarteng has rejected a request by GFG to the UK government for giving a rescue package of £170m to support the UK operation of the company.
The UK government has said that it “continues to engage closely with the company, the broader UK steel industry and trade unions”.
None of Liberty Steel’s plants would shut “under my watch”, Gupta said in an interview earlier this month to the BBC even though he has been aggressively trying to get refinancing for the business since the collapse of Greensill.
Legal action to get some of the parts of his metals group wound up has also been initiated by some of the other investors of the company.
But he and GFG Alliance, Liberty Steel’s parent company, were “not waiting for anybody” and were “doing what we can to help our businesses”, Gupta said.
“Our overall global operations are profitable, we have refinancing offers, we will refinance, and we will support our UK business also,” Gupta has said. “None of my steel plants under my watch will be shut down,” he added.
(Adapted from BBC.com)