Liberty Steel concerns grow as rescue plea rejected
Sanjeev Gupta: appealed for funds
Liberty Steel’s future was looking increasingly precarious after the UK government rejected its parent company’s request for a £170m rescue loan.
Industrialist Sanjeev Gupta hoped ministers would provide funding for his GFG Alliance empire after the collapse of its key financial backer, Greensill Capital.
Mr Gupta wrote to the Department of Business, Energy and Industrial Strategy requesting help to pay day-to-day operating expenses and soak up recent losses.
Sources revealed to The Guardian that the government refused the loan because ministers had concerns over the opaque corporate structure used by GFG, as well as whether UK taxpayer money would end up funding operations in other countries.
It has also been reported that the £42m cost of a house bought by Gupta and his wife in August 2020 would have covered a significant portion of the £170m requested from the government.
Government officials are said to have put plans in place to support the business if it is forced into administration. This could be similar to the strategy used to save British Steel in May 2019, when an official receiver took control of the company while it sought a buyer.
GFG’s interests are global and include steel making in Lanarkshire and an aluminium smelter in Lochaber. About 1,000 of the Liberty Steel workforce are currently on furlough.