Britain will allow tycoon Sanjeev Gupta to evaluate various refinancing options for his company Liberty Steel, which also owns the Liberty Steel Galati steel plant – before offering him possible government support, British Business Minister Kwasi Kwarteng said on Tuesday, Reuters reports, as cited by Agerpres.
Recently, British Prime Minister Boris Johnson said that he was confident that the Government in London would find a solution for Liberty Steel after its main financier- the Greensill Capital fund – went into insolvency last month.
“I think it is absolutely necessary to have a steel industry in the UK. This industry has a future,” Kwasi Kwarteng said at a hearing in Parliament in London. But in this case, we cannot exclude Liberty Steel from the larger group in which it operates” Kwarteng added. Assurances from Sanjeev Gupta that he can refinance his business must be considered and we must offer him the time he needs to find the sources of refinancing with which to keep his business afloat. I will not rush to offer any guarantees,” the British official stressed.
Liberty Steel, a company with 3,000 employees in the UK, reported last week that it was working to find new working capital facilities – adding that it had resumed partial production at one of its steel mills in England. However, the Government in London rejected a request for an emergency loan worth 170 million pounds ($233 million) from the gfg Alliance conglomerate controlled by tycoon Sanjeev Gupta, basing the refusal on the sheer global scale of the group’s operations as well as on the opaque business structure of the conglomerate.
Business Minister Kwasi Kwarteng reiterated on Tuesday that Britain is not ready to provide cash for the GFG Alliance.
In its insolvency application filed last month, the Greensill Capital said his main client, The GFG Alliance, had issued warnings as early as February that it would collapse if the fund stopped providing it with working capital. However, tycoon Sanjeev Gupta claims to have managed to generate interest among some financiers willing to refinance GFG’s billion-dollar debts to Greensill, but has not provided details of any concrete offers.
In July 2019, Liberty Steel, a UK-based company owned by the GFG Alliance, paid 740 million euros to take over a series of steelworks in the Czech Republic, Romania, North Macedonia, Italy, and Belgium from the ArcelorMittal group. Active on a global scale, Liberty Steel has an annual production capacity of 13 million tons in Europe, 72% of total volume, and employs 17,000 people on the continent.