Tue, 28 Mar 2023 | ADMINISTRATION
Barrett Steel has completed the acquisition of the majority of Aartree Bright Bar's business and assets from administrators. The company collapsed last month, with joint administrator Michael Magnay of Alvarez & Marshal citing “the challenging economic environment and fluctuating steel prices.”
The £13 million deal has seen Barrett Steel acquire Aartree Bright Bar’s distribution business, which operates in Southampton, Newport, Rugby and Bolton, its Willenhall-based Bright Bar business and the freehold and leasehold interests held by Aartree Bright Bar Property at those sites.
This will see more than 170 jobs secured, however, the deal does not include Aartree Bright Bar's Hot Rolled business, based in Dudley, which will be wound up, leading to the closure of the site and 45 redundancies.
Barrett Steel, which is based in Bradford, comprises 44 companies operating across engineering steels, general steels, tubes and international services.
The group's Chief Financial Officer Marcus Tyldsley commented: " We’re delighted to share that we’re acquiring a new business as part of our ongoing expansion strategy. Our focus is on delivering exceptional service to our customers, and we're confident that this acquisition will help us achieve that goal."
"As new owners, we'll prioritise the safety and wellbeing of our employees, and work collaboratively with our new team to bring fresh ideas and perspectives to the table.”
The sale of the business and assets was lead by Alvarez & Marshall managing director Michael Magnay, alongside fellow joint administrators Richard Fleming and Gemma Quinn.
Magnay commented: "This substantial investment from Barrett Steel is a vote of confidence in the business and the wider UK steel industry. The companies' creditors will now receive a substantial dividend and will have the opportunity to trade with the new business going forward. We are grateful to the employees and creditors for their support and understanding during this process, and to Barrett Steel for its commitment to the deal."
The acquisition by Barrett Steel comes amid considerable controversy, however, after GFG Alliance had gone to the high Court in Manchester in a bid to overturn Aartree Bright Bar’s administration. GFG, which is owned by steel magnate Sanjeev Gupta, said that it had “wrongly” been placed into administration by its main creditor, FGI.
GFG said that it planned to integrate Aartree into its Liberty Steel brand and was aiming to save the entirety of the company’s operations. However, its challenge was rejected by the court, with Aartree placed into voluntary liquidation, paving the way for its sale to Barrett Steel.
GFG Alliance’s Chief Transformation Officer Jeffrey Kabel said: "GFG Alliance fought hard to rescue Aartee Bright Bar and the 250 steelworkers it employs across the UK after it was unnecessarily plunged into administration several weeks ago. Since that point, GFG has provided £650,000 to shield employees from redundancy while a rescue plan could be negotiated.”
"Today the administrators have decided against GFG's business plan, which would have rescued ABB in its entirety, saved all its 250 employees and ensured its continuation as a going concern. Within hours of this development, we've witnessed the devastating impact of the decision with the announcement of immediate layoffs of all employees at ABB's steel plant in Dudley.”
"We struggle to see the logic in this outcome which has put short-term gain for a selected few ahead of the long-term interest of the UK steel industry and its workforce."
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