Gupta in talks over £200m lifeline for UK steel plants

LIBERTY steel is in talks to secure a £200m cash lifeline that could keep its 12 plants and 3,000 employees in the UK safe until it can raise more money.

the company, run by tycoon sanjeev Gupta, is in discussions with california-based investment group White oak Global advisors.

this is the same group that bailed out Liberty’s operations in australia earlier this week.

although negotiations with White oak are still at an early stage, some preliminary documents have already been drafted.

Liberty has been in crisis since the collapse of Greensill capital in March.

It is also being sued by tata steel after defaulting on payments owed following its £100m purchase of tata’s speciality steel business in 2017.

Greensill was the largest lender to the GFG alliance, Gupta’s wider group of companies that includes Liberty.

the 49-year-old magnate had used Greensill to finance the rapid expansion of his global steel, hydropower, engineering and aluminium empire. He had been dubbed the ‘saviour of UK steel’ after buying ailing plants in Newport, rotherham and stocksbridge in south Yorkshire, among others.

But Gupta has been struggling to arrange funding to keep all of his companies – including his UK steel operations – afloat.

this week he set up a restructuring team that has been given carte blanche to sell off ‘underperforming’ parts of the empire.

a source close to Liberty said the cash injection from White oak would allow Liberty’s UK arm to return to full production – which would help it take advantage of strong steel prices. Doing this would speed up the company’s recovery from the inside and make it more attractive to other potential backers further down the line, the source said.

credit suisse would need to approve the deal with White oak, as it has a claim on Liberty’s UK arm.