Margaret Hodge’s fortune hammered as vulture funds swoop on father’s Stemcor steel empire

The multinational founded by her father Hans Oppenheimer was once worth millions but is now perhaps worth less than £250,00

Margaret Hodge’s stake in Stemcor was once worth millions (Getty Images)

The personal fortune of one of Parliament’s most powerful committee chairs has taken a hammering thanks to a major corporate reorganisation within her family’s deeply troubled steel empire.

Margaret Hodge’s stake in Stemcor, the multinational founded by her father Hans Oppenheimer, was once worth millions but is now perhaps worth less than £250,000.

Meanwhile annual dividends, which in happier times furnished the famously feisty of the Public Accounts Committee chairwoman a probable income of at least £50,000, will vanish for years to come.

Vulture funds have swooped in to buy up its debt at huge discounts, as banks cut their losses and run.

The former Labour minister’s brother, Ralph Oppenheimer, 72, retired “with immediate effect” as executive chairman in September.

Stemcor was set up by Ms Hodge’s father, Hans Oppenheimer, and had been run by Ralph for decades after his father died in 1985.

It ran up debts of more than $1bn (£620m) with a host of banks through its revolving credit facilities. But the business, which suffered massive losses in its international trading division, has struggled to service the loans.

The banks agreed to a number of standstill deals on repayments throughout this year and are close to launching a major restructuring, with a host of its businesses to be sold around the world.

Because Stemcor is privately owned, it is hard to value, but accounts for last year said shareholders’ funds totalled £184mcompared with £241m the previous year. It will now be a fraction of last year’s value. Full details of the plan will emerge when it is finalised early in the New Year.

In the meantime, some bankers to the company have been selling their debt to vulture funds led by the Manhattan billionaire Leon Black’s Apollo at as little as 30 cents for $1 worth of loan.

Companies like Apollo buy up debt cheaply and demand dramatic change to the company to increase the value of the loan. Others thought to be buying into Stemcor’s “distressed debt” include Australia’s Anchorage Capital Partners and London-based Duke Street.

News of Stemcor’s troubles could arguably be good for Ms Hodge’s image, however. Because of the Oppenheimer family wealth she is among a cadre of senior Labour politicians criticised by the right for being “champagne socialists”.

British employees will also be relieved as the restructuring is unlikely to affect the UK workforce or plants.

Ms Hodge’s son from her first marriage, Nicholas Watson, is listed at Companies House as a director of the Stemcor division, Barclay & Mathieson.

A spokeswoman for Ms Hodge, who as culture minister in the last Labour government criticised “nepotism” in the arts world, declined to comment on her son’s position, or on the financial difficulties of Stemcor.

Across Stemcor’s businesses worldwide, company accounts show there were 118 injury accidents last year, 39 of which were serious. Ofthose, 25 were in the group’s Barclay & Mathieson UK stockholding business and a German site. The company said safety performance overseas was “encouraging” but the total number of lost days (over 1600) remained a “matter for concern”.