Via AG Metal Miner
Steel news continues to cover the announcement that UK steel producer and distributor Aartee Bright Bar (ABB) has gone into administration. The move came after ABB's commercial financier, FGI, decided to enforce its debts against the company. According to a February 7 report from Sky News, the West Midlands-based business appointed New York-headquartered Alvarez & Marsal as administrators.
Administration in the United Kingdom is similar to Chapter 11 of the United States Bankruptcy Code. It generally occurs whenever a company is unable to pay its debts. Neither Alvarez & Marsal's London offices nor parent company Aartee Group was available for comment. However, the latter issued an email statement on behalf of ABB.
"Despite the very significant challenges facing the UK steel industry, Aartee Bright Bar has been making regular and substantial payments to its creditor FGI." Sky News also quoted the parent company as saying, "it is therefore disappointing that FGI has chosen to enforce on a small remaining debt which the business has a plan to clear in the very near future."
Bright bars are value-added long products with high tolerances and both smooth and shiny finishes. ABB produces them in various shapes, including round, flat, square, and hexagonal. Applications include engineering and construction, fastener production, machine component manufacturing, and tool manufacturing. Bright bars are also used in the auto sector to create frames and chassis.
Steel news reports indicate that Aartee Group originally acquired ABB, then known as Acenta, in July 2018. ABB's main office and production sites are in England's West Midlands region, which also houses a distribution center. The company also has distribution centers in North West England and Wales.
Bright bar production facilities at ABB include a bank of high-speed coil-to-bar drawing machines. There is also a complement of bar-fed draw benches, turning and polishing machines for large-diameter rounds, and milling machines for squares and flats. Besides bright bars, ABB also produces hot rolled products in 120-, 140-, 150-, 180- and 210-mm dimensions. They accomplish this by re-rolling engineering-grade flat and steel bars on-site.
The UK steel industry continues to face difficulties due to the effects of the COVID-19 pandemic. This has not been aided by high energy costs caused by Russia's invasion of Ukraine or the country's poor 2023 economic outlook. Indeed, the International Monetary Fund expects the UK economy will shrink 0.6% in 2023.
Tata Steel and British Steel are two UK facilities equipped with blast furnaces. Unfortunately, they also face heavy carbon taxes. That said, the UK Government has proposed a £300 million (over $362 million) package to each of those companies. The goal is to help them cover the cost of replacing those blast furnaces with newer electric arc furnaces.
By Christopher Rivituso
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