UK government must save Liberty Steel soon to protect supply chain jobs, warns Labour
April 21, 2021, 10:19 am

UK government must save Liberty Steel soon to protect supply chain jobs, warns Labour

The Liberty Steel site in Rotherham. UK government ministers turned down a request from Liberty Steel’s parent company GFG for a £170m emergency bailout following the collapse of their main financial backer Greensill Capital.

Party says insolvency could threaten thousands of workers if owner Sanjeev Gupta fails to find new lender

The Labour party has called for the government to step in to save Liberty Steel from an insolvency that could threaten thousands of supply chain jobs if owner Sanjeev Gupta fails to find a new lender to prop up his metals empire.

Gupta is scrambling to refinance his companies, after the collapse of Greensill Capital, which lent him as much as $5bn (£3.6bn). The collapse has raised concerns over the future of companies under Gupta’s GFG umbrella, including about 3,000 Liberty Steel workers in the UK as well as about 35,000 workers across the world.

The Conservative government is preparing to intervene to save UK steel jobs only if Liberty Steel fails to refinance and becomes insolvent. Labour has said that would be too late for as many as 3,300 workers in companies that supply Liberty. In an insolvency suppliers’ bills are often left unpaid, even if a business’s assets are later bought.

Lucy Powell, Labour’s shadow business minister, said a government commitment to stepping in before insolvency could allow suppliers, ranging from cleaners to makers of machine components, to continue to deal with Liberty without fearing losses.

“The people who lose out most from the option of becoming insolvent are the supply chain,” Powell said. “If the government were to indicate this were an option that would inject confidence into the supply chain.”

Government sources have indicated that a leading option for a potential Liberty collapse is to copy the British Steel rescue. After British Steel entered liquidation in 2019 an official receiver was appointed to run it with a government indemnity until a buyer, China’s Jingye, was found.

The whole process cost the UK government nearly £600m. However, Chris McDonald, chief executive of the Materials Processing Institute, a steel research centre, said the supply chain also bore costs running to hundreds of millions of pounds. McDonald has said a Liberty collapse could cost its suppliers £350m.

“What was slightly forgotten about is that as soon as the business falls into insolvency the supply chain takes a hit,” McDonald said. “A lot of those are small businesses.”

It is understood that Labour’s preference would be for GFG to find a new lender, preventing the need for any government intervention. The party has previously called for the government to commit to using UK steel for defence and national infrastructure to help the industry.

Any attempt to rescue the various Liberty Steel plants, including Rotherham and Stocksbridge in South Yorkshire, could be complicated by the labyrinthine corporate structure used by Gupta’s companies.

Business secretary Kwasi Kwarteng previously turned down a request from Gupta for a £170m loan because he did not receive guarantees that it would be used exclusively to support UK assets, he told MPs at a committee hearing last week.

source: Jasper Jolly

Levant

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.