Liberty Steel boss Sanjeev Gupta says collapse of lender is challenging

Liberty Steel boss Sanjeev Gupta says collapse of lender is challenging

The boss of the UK’s third-largest steelmaker has said the collapse of its main financial backer “creates a challenging situation”.

Sanjeev Gupta was speaking at crisis talks with unions concerned for the future of Liberty Steel after specialist bank Greensill Capital went into administration.

The collapse puts 5,000 jobs at risk at Liberty Steel and other firms.

Mr Gupta said his group was taking “prudent steps” to manage cash.

Greensill Capital was the main lender to Mr Gupta’s sprawling empire, GFG Alliance, which includes Liberty Steel.

Liberty owns 12 steel plants in the UK including in Rotherham, Motherwell, Stocksbridge, Newport and Hartlepool.

After administrators were appointed on Monday, Greensill said in a court filing that Mr Gupta’s operations were in “financial difficulty” and defaulting on debt.

But in his address to union representatives on Tuesday, Mr Gupta said: “We have adequate funding for our current needs while we bridge the gap to refinancing the business.”

He said securing alternative long-term funding was “progressing well”, but would take “some time” to organise.

“We had been preparing to refinance the business to diversify away from Greensill and broaden our capital base,” he added.

Mr Gupta said GFG Alliance as a whole was “operationally strong” and benefiting from a 13-year high in steel prices.

But he added: “There are some exceptions and I’m sorry to say that includes some of our UK steel businesses.”

Mr Gupta said he was working on securing working capital facilities to support Liberty and “bridge the funding gap” while refinancing took place.

He also outlined longer-term measures to address the loss-making parts of the business, including possible partnership opportunities.

The Community union has said the future of Liberty’s strategic steel assets “must be secured” and that it is ready to work with “all stakeholders to find a solution”.

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