Talks with backer
Steel jobs at risk as Gupta’s lender Greensill collapses
The Gupta business bought the Dalzell works
Britain’s steel industry is one again facing huge uncertainty after the principal financial backer of one of the UK’s largest industrial groups fell into administration.
Specialist bank Greensill Capital is the main lender to businessman Sanjeev Gupta’s GFG empire, whose Liberty Steel acquired the Dalzell and Clydebridge plants in 2016.
Administrators at Grant Thornton have been appointed after the the firm fell into ‘severe financial distress’, and was unable to repay a loan from Credit Suisse.
The administration puts 5,000 jobs at risk at the group’s Liberty Steel and other firms across the UK. GFG has relied on Greensill for around $5 billion (£3.6 billion) to pay its suppliers.
Greensill’s chairman Maurice Thompson and two other board members also resigned last night.
Union officials were already due meet with Mr Gupta on Tuesday.
Business Secretary Kwasi Kwarteng is understood to have held an emergency meeting on Sunday with the chief executive of Liberty Steel UK, John Ferriman.
They discussed contingency plans in the event that Greensill went bust, although this did not include nationalisation.
Liberty Steel is the UK’s third-largest steelmaker, employing 3,000 at 11 sites. Another 2,000 in engineering businesses within the group are also involved. Apart from Dalzell its Scottish operations include the aluminium smelting plant at Lochaber.
Many of Liberty Steel’s assets were part of Tata Steel’s UK business.
It is reported that Greensill’s heavy exposure to Mr Gupta’s business has prompted Swiss investment bank Credit Suisse to freeze withdrawals from up to £10bn worth of funds held as security.
A spokesman for Mr Gupta said the company had adequate funding for its current needs and its refinancing plans were progressing well. It added that a recent upturn in global steel prices was beneficial for the company’s prospects.