U.K. Says ‘All Options on Table’ to Help Gupta’s Liberty Steel
(Bloomberg) -- Business Secretary Kwasi Kwarteng said the government is looking at all options to protect Liberty Steel’s U.K. factories as parent group GFG Alliance struggles to refinance following the collapse of its biggest lender.
Kwarteng at the weekend rejected a request from Sanjeev Gupta’s GFG for a 170 million-pound ($234 million) bailout, due to “concerns” over how the money would be used.
“We are custodians of taxpayer money, and there were concerns about the very opaque structure of the GFG group,” Kwarteng told the BBC on Tuesday. “We feel that if we gave the money, there was no guarantee that that money would stay in the U.K. and would protect British jobs.”
At stake are about 5,500 GFG jobs in the U.K., including 3,000 across 12 Liberty Steel plants. Kwarteng said that despite rebuffing the bailout request, he’s not ruling out helping the steelmaker under its current ownership.
“The current owner is looking at ways of refinancing the group, and I have been very clear that I want to see his plans worked through before we actually go into anything in terms of a further plan to keep the jobs and the plants safe,” he said. “All options at the moment are on the table; we think that the steel industry has a future in the U.K.”
The business secretary said the U.K.’s plan to eliminate greenhouse gas emissions by 2050 “has changed the dynamics in terms of the government’s relationship to parts of the economy.”
“We want to see clean steel, electric arc furnace-produced steel of the kind Liberty makes,” he said. “We think that that has a future in the U.K.”
The future of Gupta’s businesses has been cast into doubt after the collapse of Greensill Capital, which provided $5 billion of credit facilities to GFG. Gupta is seeking to negotiate a payment standstill agreement with the lender and restructure its finances.
GFG said in a statement Monday that most of its businesses globally “are performing well and generating positive cash flow,” and that it’s taking “prudent steps” to manage its resources.
Kwarteng also said former Prime Minister David Cameron did nothing wrong after it emerged he lobbied the current government on behalf of Greensill.
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