Government assured steel magnate’s Scottish companies are on a ‘profitable footing’ despite collapse of his financiers
Fergus Ewing has told MSPS steel magnate Sanjeev Gupta had reassured him his Scottish companies were financially sound despite the collapse of his financiers.
The Cabinet secretary for the rural economy said while there were “commercial sensitives” around the the financial affairs of Mr Gupta’s GFG Alliance, he had spoken with the billionaire about Greensill Capital entering administration, and had been told the Scottish steel and aluminium businesses were
“presently on a profitable footing”.
The failure of Greensill, a financial services company, has left many fearing that thousands of jobs at Liberty Steel’ s assets in the uk could be at risk, including those who work at the Loch abe ra lu mini um smelting plant, to which the scottish government has provided more than £500 million of guarantees.
My Gupta’s company, GFG Alliance, also operates the Dalzell and Clydebridge steel works, the hydro-electric power station at fort william, jaham a highland estate sands hand
Cycles. It is understood the parent firm owes Greensill more than £3 billion.
Making a statement in Holyrood on Wednesday, Mr Ewing revealed he had spoken with the steel tycoon on Thursday last week and he had been “open about challenges posed by the collapse of Greensill, but also emphasised the underlying operational health of GFG’S Scottish operations”.
Mr Ewing said: “He indicated that market demand is strong and metals prices are currently among the best seen in over a decade. Hence, GFG’S Scottish steel and aluminium businesses are presently on a profitable footing, according to mr gupta.
“Mr Gupta told me the group has adequate funding for its current needs while they progress refinancing. he nevertheless confirmed that stabilising the finances of the gfg alliance in the near term is important to its future activities, including those in Scotland.”
However, Mr Ewing admitted “reliable information on the extent of Greensill’s operations remains unclear”, but that a ministerial taskforce was “monitoring the situation closely”.
Mr Ewing said Liberty Steel Dalzell Limited was the recipient of a Scottish Investment Bank loan of £7m, but it would have invested £18m by the end of this financial year.