Steel giant seeks bailout to save 5,000 jobs
FEARS were growing for 5,000 British jobs after a tycoon’s steel empire asked for a Government bailout of £170million.
Sanjeev Gupta’s GFG Alliance owns Liberty Steel, aluminium firm Alvance and renewables group Simec. Its main lender, Greensill Capital, collapsed this month.
GFG was already struggling after a 60 per cent collapse in demand for steel from the Covid-hit aerospace market. It has tried to find alternative funding for three weeks.
Insolvency sources said that since GFG has had to ask for a handout, that indicates its position is perilous.
Liberty is the UK’S third-biggest steel producer with 12 plants employing 3,000. GFG’S other divisions have 2,000 staff.
Kwasi Kwarteng, the Business Secretary, has met Liberty executives several times to discuss the funding crisis.
The Government wants to put together an aid package – but it is thought to have reservations about GFG’S transparency and its governance.a GFG Alliance spokesman said the company was “operationally strong” and had adequate funding but conceded Greensill’s collapse created a “challenging situation.
“Discussions to secure alternative long-term funding continue to make good progress and while this takes place, we have asked all of our businesses to manage cash carefully.
“Combined with the efficiency drive we’ve implemented over the past year this has ensured that most of our major businesses are generating positive cashflows,” he added.
The Department for Business said: “We are closely monitoring developments around Liberty
Steel and continue to engage closely with the company, the broader UK steel industry and trade unions.
“The Government has supported the steel sector extensively, including providing over £500million in recent years to help with the costs of energy.
“Our unprecedented package of Covid support is still available to the sector to protect jobs and ensure that producers have the right support.”
The news comes as Mr Gupta’s wife Nicola begins a makeover of her £42million mansion.
She has received planning permission for work on the Grade I listed property in London’s Belgrave Square, including redecoration and protection for balustrades on the grand staircase.