Liberty Steel Group has entered a standstill agreement with Greensill Bank.
It pauses all enforcement actions between the South Yorkshire headquartered business and the subsidiary of the collapsed financial institution as it focuses on recovery.
Greensill Bank, part of Greensill Capital, is Liberty’s largest creditor on the business’s debt facilities, provided in 2019.
The agreement lasts until October 31, with potential to extend until the end of the year.
Liberty said it will enable the company to develop a longer term sustainable financing structure, with detailed due diligence and information exchange continuing between the two parties.
A Liberty spokesperson said: “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.”
HMRC had filed then withdrew a winding up petition for Liberty earlier this year as progress with creditors was made.