Liberty House acquires Scunthorpe steel mills

Sanjeev Gupta’s metals and industrials group Liberty House has added to its network of UK steelworks with a deal to acquire 100% of the share capital of Scunthorpe-based Caparo Merchant Bar plc (CMB) from the administrators of Caparo Industries.

“The acquisition is based on the expectation of reaching a final agreement with the pension trustee concerning Caparo Industries’ 1,700-member pension scheme, and other key creditors of the business,” said Liberty House.

The company, which employs 145 at two rolling mills in Scunthorpe, is Britain’s largest producer of merchant bar.

That includes a range of steel bars and light sections for the construction, energy, infrastructure, oil & gas, shipbuilding and transport industries.

Liberty House said CMB remained solvent despite its parent Caparo Industries Plc going into administration in late 2015, and since then the directors of the company have kept the business in profit.

“However, CMB remained coupled to the Caparo 1988 Pension Scheme which had the effect of restricting CMB’s ability to develop its own financial flexibility,” said Liberty House.

“This placed the solvency of the company at risk, potentially jeopardising creditors and the pension benefits of its employees.

“Liberty has sought a solution that protects both the business and the pensions of its employees.

“Over the last few weeks, Liberty House representatives have been in extensive discussions with the trustee of the Pension Scheme.

“This scheme has some 1,700 members including most of the CMB employees but also existing employees of Liberty though its acquisition of the Caparo Industries business assets in 2015.”

Liberty Industries chief financial officer Derek O’Reilly said: “We have been working with the pension scheme trustee to deliver a solution which we believe is deliverable although this area is complex and there is still execution risk.

“However, to prevent the business going into administration, and losing all possibility of a pension solution, it was essential that we immediately acquired the business to provide the possibility to protect CMB employees’ benefits.

“We are also trying to find a solution that gives many other Caparo Industries pension scheme members — currently in PPF assessment — the chance to achieve better benefits than would otherwise have been available.”