150 jobs saved as Liberty Industries purchases Caparo Merchant Bar
Caparo Merchant Bar (CMB), the Scunthorpe-based steel bar manufacturer, has been bought by Liberty Industries in a rescue deal that looks to have saved 150 jobs and 1,700 pensions.
The news was announced by Matthew Hammond, joint administrator of CMB's parent company (Caparo Industries), who stated: “We are delighted to confirm that, with the cooperation of Tata, the minority shareholder of CMB, we have today completed a sale of the entire share capital of CMB to Liberty.”
Who are Caparo Merchant Bar?
CMB specialises in converting primary steel products (sourced from third parties) into finished goods for the construction, transport and energy sectors.
It operates two hot rolling mills, and is said to produce up to 400,000 tonnes of steel each year.
The firm has been operating for over 32 years, but has struggled since Caparo Industries went into administration in 2015.
That same year, CMB wrote off the £22.7m debt it owed to its parent company and continued to operate as a standalone company under the watchful eye of administrators PwC.
Though CMB technically remained solvent, the firm was laden with heavy debt. This was mainly a result of the company being coupled to the Caparo 1988 Pension Scheme, which limited financial flexibility and required repayments on a £16m bank loan.
Liberty Industries acquires CMB
Liberty Industries is a prominent international metal business that owns several other steel-related operations across the UK.
To complete the acquisition, the company bought out Tata Steel, who owned 25% of CMB.
Sanjeev Gupta, the company's founder, stated: “We can now supply an extensive range of both flat and long products, with steel mills in all parts of the country.
“This will enable us to compete more effectively and win market share from imports, helping rebuild the UK steel industry... I am especially pleased about the prospect of being able to assist the Caparo Industries pension scheme more widely and improve outcomes for many more of its 1,700 members.”
This acquisition is great news for the Scunthorpe-based firm and its employees. Many were at risk of losing both their jobs and pensions if CMB had failed to find a buyer.
After the buyout, Liberty Industries announced expansion plans that are expected to generate an additional 300 production jobs. Therefore, this outcome appears to be mutually beneficial.