Steelworkers were handed a boost today after Liberty struck a debt deal with creditors.
The firm was plunged into crisis when its main lender, supply chain finance company Greensill, collapsed in March 2021.
Thousands of jobs were thrown into jeopardy at Liberty, which is owned by the Gupta Family Group alliance.
But the firm today announced it had reached a “standstill agreement” over debts.
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Under the pact, which lasts until November and could be extended, “all enforcement actions are paused between the parties over the Greensill Bank debt facilities provided to Liberty in 2019” - meaning Liberty can “develop a longer term sustainable financing structure”, it said.
A spokesman added: “Today’s standstill agreement with Greensill Bank demonstrates we are getting close to a consensual debt restructuring that is in the best interests of all our stakeholders.
“We are working intensively towards a settlement with our major creditors in a timeframe which would obviate the need for a legal battle.
“Our core businesses continue to perform well and are operationally strong despite some economic headwinds.”
Community steelworkers' union national officer Alun Davies said: “This is welcome news, and will be well received by our members who have been living under a cloud of uncertainty for over a year."
But he added: “Whilst there are encouraging signs that things are moving in the right direction, it’s clear that huge challenges remain.
“We look to Liberty to deliver on their promises to refinance and build a sustainable future for our businesses, supporting high quality employment for generations to come.”
GFG has been under investigation by the Serious Fraud Office which opened a probe 13 months ago over suspected fraudulent trading and money laundering, including its financing arrangements with Greensill.
The Mirror has been campaigning to Save Our Steel since 2015 when the industry was hammered by closures and thousands of job losses.
The sector directly employs 33,700 workers and supports another 42,000 posts in supply chains.
It is worth £2.1billion to the UK economy.
