Caparo Merchant Bar mill in Scunthorpe changes hands
The Caparo Merchant Bar mill in Scunthorpe
By Scunthorpe Telegraph | Posted: 7 Jul 2017
A NEW name will appear above the Caparo Merchant Bar Mill in Scunthorpe after 32 years.
The Liberty House Group, owned by Sajeev Gupta, completed its long-expected takeover at the weekend.
No financial details have been revealed but the final deal is subject to an agreement over a new pension scheme for 1,700 Caparo employees in Scunthorpe and across the UK, as well as other key creditors.
In order to acquire 100 per cent of the share capital of the business, Liberty House bought a 25 per cent holding from Tata Steel, the former owners of the Scunthorpe works.
It is the third time in a year Mr Gupta has come to the rescue of steel plants in the UK.
Previously his Liberty Group has bought two plate mills in Scotland and a speciality steel business in South Yorkshire from Tata Steel.
Caparo employs 145 workers at two full-automated rolling mills in Scunthorpe and is Britain’s biggest producer of merchant bar.
The mill remained solvent despite its parent Caparo Industries Plc going into administration in late 2015.
Since then the directors of the company have kept the business in profit.
The employees have remained stake-holders in the Caparo 1998 Pension Scheme. But Liberty is said to have found a solution that protects both the business and the pensions of its employees. Over the last few weeks, Liberty which acquired some of the other Caparo Industries assets two years ago have been in extensive discussions over the pension scheme.
Spokesman Derek O’Reilly said:”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.”
The Caparo mill, which can produce 400,000 tonnes of steel annually, was set up in 1985, after the owners Lord Paul and his family acquired the town’s former rod mill from British Steel.
Around £10 million was invested in the business and at the time the former British Steel company was given a 25 per cent share.
Since 1995, Caparo has spent a further £16 million on improving the efficiency and product range of the mill.
Steve McCool, national officer for the Scunthorpe steel industry’s main trade union Community, said: “We look forward to working with Liberty following their purchase of Caparo Merchant Bar. Liberty are acquiring a first rate workforce and an excellent business, which would appear to be a good fit with Liberty’s existing UK steel assets. We will be seeking an early meeting with the company to understand their plans for the business and what this announcement means for the workforce going forward.”
A British Steel spokesman said; “Caparo Merchant Bar are a long-standing customer of ours and we are pleased to hear of the acquisition. We look forward to working with the new owners.”