A major customer of Britain’s third-largest steel producer has been forced to appoint administrators, adding to the industry’s financial woes.
Sky News reports Aartee Bright Bar, which employs 250 people and is based in the West Midlands, has hired Alvarez & Marsal to handle an insolvency process this week.
Sanjeev Gupta’s industrial conglomerate includes Liberty Steel.
Mr. Gupta is said to have close ties to Aartee’s founder, Ravi Trehan, and Greensill Capital, the controversial supply chain finance group that failed in 2021, is said to have financed a number of trades between the two.
Michael Magnay, Joint Administrator at A&M Said: “Like many businesses in its sector, Aartree Bright Bar has been facing significant headwinds as a result of the challenging economic environment and fluctuating steel prices.
“Against this backdrop, Administrators have been appointed and we are exploring the options available to preserve value.”
Aartee Bright Bar’s assets would be an apparent sale for Liberty Steel, according to a source in the steel sector on Tuesday.
While a source close to Liberty Steel claimed it would “look at how it could help,” a spokesman for the company declined to comment.
Aartee is a producer, stockist, and distributor of steel goods with locations also in Lancashire and Wales.
Aartee Bright Bar (ABB) has been paying regular and sizeable payments to its creditor FGI despite the very real issues the UK steel industry is facing, according to a statement reportedly prepared on its behalf and sent via email from Aartee Group.
“The management of ABB will move rapidly to ensure the issue is settled with the administrator,” the statement reads.
Its bankruptcy coincides with discussions between the government and Tata Steel and British Steel, two of Liberty Steel’s biggest rivals, regarding £600 million in taxpayer subsidies to support their switch to more environmentally friendly electric arc furnaces.
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British Steel’s funding has been called into question by its Chinese owner’s proposal to eliminate approximately 800 workers, mostly at its Scunthorpe factory.
Additionally, Mr. Gupta has disclosed plans to eliminate hundreds of positions across all of his UK operations.
Source: Sky News