Liberty Steel to restart production as talks go on
Steel plate manufacturing in Dalzell (pic: Liberty Steel)
Industrialist Sanjeev Gupta expects his Liberty Steel plants to restart next week as it insists talks on refinancing the group are ongoing, as well as discussions with the UK government.
The government has rejected appeals from parent group GFG Alliance for a £170m emergency loan, but is considering ways to protect 3,000 British workers and the steel industry.
The company, which has steelworks in Lanarkshire and an aluminium smelter in Lochaber, is seeking new funding after its main financial backer Greensill Capital collapsed.
Mr Gupta’s global conglomerate said its steel and mining operations in Europe and Australia were booking record profits and had adequate funding.
However, in a special podcast sent to all GFG Alliance staff, he would not confirm the extent of GFG’s debts, but said they were “substantial … many billions”.
He said that its dependence on Greensill was because it had not been able to access “normal, traditional financing”.
He said the UK steel industry “has been in a difficult place for a long time”, a situation that had been made worse by Brexit, the downturn in diesel car manufacturing and the coronavirus.
Liberty Steel is working with UK customers on payment terms that would bring in cash earlier while looking for additional working capital facilities.
GFG said: “Liberty Steel UK continues in constructive discussions with the UK government on measures to supplement these efforts.”
Kwasi Kwarteng, the UK Business Secretary, held “constructive talks” with the GMB, Unite and Community unions on Monday afternoon. He has previously said the government was “looking at all options to see what we can do” to secure the future of Liberty Steel.
Unions have called for nationalisation. Ross Murdoch, GMB’s national officer, said: “Now that the government has stated it will not provide the bailout sought by Sanjeev Gupta … plan B must include all options, including taking the UK business into public ownership.”