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Liberty near rescue deal for steel firm hit by cash crunch

The Telegraph logo The Telegraph 19/06/2017 By Alan Tovey

Liberty near rescue deal for steel firm hit by cash crunch  A rescue bid which will guarantee jobs at struggling steel business Caparo Merchant Bar could be announced as soon as today.

The Scunthorpe-based business is understood to be struggling under a heavy debt load and the legacy of its former parent’s collapse into administration.

CMB has almost 150 staff working to produce steel bars and beams used in construction, shipbuilding, transport and the energy sectors.

The business was one of the few units to survive the collapse of parent Caparo Industries a year and a half ago as the steel crisis wreaked havoc in the sector.

CMB has since been run as a standalone operation under administration by PwC.

However, it now understood to be facing fresh problems in the form of a cash crunch brought on by the rising price of the steel billets which it turns into finished products.

Sanjeev Gupta’s Liberty Industries group is understood to have tabled a rescue deal in which it takes on CMB – including its pension liabilities – and protecting jobs.

“It’s much easier to take on the business as a going concern with customers and orders than trying to restart it if it collapses entirely,” said one source with knowledge of the negotiations. “But the situation is getting critical for CMB.”

It is not known if Liberty – which has a strategy of snapping up distressed assets – will offer a token price from CMB or take on its other liabilities under the offer’s terms.

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