Court hearing set to begin in bid to save 250 Black Country jobs

The High Court in Manchester will hear a challenge by GFG Alliance against ABB’s entry into administration.

ABB was bought by GFG on February 23 after it went into administration following a creditor dispute. GFG has since provided funding to cover wages to prevent a reduction in jobs expected under the administration.

GFG, the parent company of Liberty Steel, says its rescue plan would save 250 steel jobs at Planetary Road, the hot rolled bars division at Peartree Lane, Dudley and the distribution arm.

At the hearing, GFG will seek to immediately end the administration of ABB.

GFG’s legal representatives will argue that its business case for ABB will provide a far superior outcome for creditors, employees and all other stakeholders compared with a damaging insolvency process.

Specifically, GFG will state that ABB was wrongly put into administration.

It will argue, GFG has a business plan for ABB that is supported by a majority of its creditors and will ensure the business remains a solvent going concern.

It will also say ABB will benefit from financial support from GFG to cover working capital needs. GFG has provided over £200m of financial support to its UK businesses in the past 18 months and ABB is a solvent company with enough cash and facilities to satisfy existing creditors.

GFG’s industrial plan for ABB will ensure no redundancies and integrate the business with Liberty Steel’s Engineering Bar division while the administration process will inevitably lead to plant closure and redundancies.

GFG will also argue it has demonstrated its commitment to the employees of ABB by providing £620,000 to fund wages and avoid instant redundancies which were intended by the administrator.

Jeffrey Kabel, Chief Transformation Officer, said: “Our plan for ABB would see jobs protected and provide superior outcomes for its creditors immediately.

"The administration process at ABB is unjustified, unnecessary and unsupported by a majority of its creditors and employees whose jobs are on the line. We urge creditors, employees and stakeholders to get behind our application to save ABB.”