One of the biggest news stories in March of this year was the undignified collapse of Greensill Bank and all the nasty fallout that caught out some pretty big fish, as a fine-weave net was dragged along the sludge at the bottom of a murky financial river. One such fish was Liberty Steel. Greensill was the largest lender to Sanjeev Gupta’s GFG Alliance, the parent company of Liberty Steel, and its failure put in jeopardy some 5,000 jobs in the UK.
Help is now at hand from four specialist operators. Liberty Steel has hired a team of expert directors to its board to accelerate the group’s overhaul and refinancing. The company said the four new directors will make up a new 'restructuring and transformation committee', which will be given independence to restructure Liberty and either fix or sell off under-performing divisions. Let's be honest, this is a jolly good idea and we wish our profession had thought of it; what do we spend all of our days doing?
You may remember that Liberty has been forced to seek urgent financing, with the Government rejecting its appeal for a £170 million bailout in March. It (rather defensively, we thought) said yesterday (Wednesday 5 May) that it was prudently managing its cash in many businesses around the world to lessen the impact of Greensill's fall from grace. It has already cut a deal with Liberty Steel and Finance in Australia to reduce its exposure to the Greensill fallout.
Do any of you know who Jeffrey (S - we think the 'S' is vital, here) Stein is? His LinkedIn page says he "... has actively participated in the restructuring of numerous companies both in and out of Bankruptcy", which makes us feel a little nervous for Liberty, as companies are incapable of going into Bankruptcy in the UK, in the same way as strawberries are incapable of driving a fork-lift truck. Jeffrey is the new Chief Restructuring Officer of Liberty, a point he hasn't yet added to his LinkedIn page (but we are sure he will).
Liberty said the director appointments mark a “step forward” in its response to the Greensill collapse. We in the NTI newsroom consider this to be an understatement, but maybe necessarily so. The spokesperson went on to say that they intend to, “negotiate an amicable solution with Greensill’s Administrators and other stakeholders which protects value and provides the best outcome for all stakeholders”. If you work for Grant Thornton and you have taken ten minutes away from looking at six million financial transactions please could you tell the licence holder about this. It will save them the bother of getting in touch.