Liberty Steel owner admits ‘many billions’ owed to Greensill Capital but insists factories will remain open
The owner of Liberty Steel has admitted he owes “many billions” of pounds to Greensill Capital but he insists that the collapse of his main lender will not bring his business down.
Sanjeev Gupta says he has received a “barrage” of offers to refinance the debts of GFG Alliance, a conglomerate that owns Liberty Steel, since Greensill went into administration three weeks ago - but he wouldn’t provide details.
“I will not give up,” Gupta told ITV News.
“As long as it’s on my watch, none of my steel plants will shut down. We have a good future.”
Last weekend the Business Secretary rejected a request for a £170m rescue loan from Gupta on the grounds that GFG’s financial structure was “opaque”.
Speaking from Dubai, Sanjeev Gupta explained that GFG has been a private family business for three generations and that “keeping things close to our chest is the nature of our business”. But he says he recognises there is a need to “become more corporate”.
Gupta says Liberty Steel is under what he calls “short-term pressure,” from suppliers who are reducing terms and from credit insurers who are refusing cover.
He explained that it was difficult to refinance because because Greensill Capital holds security over many of Liberty’s assets but he is confident he will find a way through.
“There is no shortage of people who are willing to support the steel industry,” says Gupta. “We will get the refinancing, given the overall health of our business.”
Gupta confirmed that Citigroup, a bank, filed series of winding up petitions on Wednesday against GFG in an attempt to recoup money owed to Greensill’s creditors.
“We have a legal standoff against the lenders and the creditors of Greensill,” Gupta says.
“We are in litigation so I can’t talk about specific details but I can confirm we owe substantial amounts of money, many billions.
"But we also have one of the most successful steel companies [Liberty] in the world so it has to be seen in that context.”
GFG Alliance has businesses all over the world. In the UK, GFG employs 5,000 people, including around 3,000 steel workers at 11 sites, including Motherwell, Hartlepool, Wednesbury and Newport.
Liberty Steel’s Rotherham plant has two electric arc furnaces. Stocksbridge makes high-spec steel for the aerospace industry.
The Business Minister, Kwasi Kwarteng, describes Liberty Steel as “a really important national asset” and says that the government will intervene to save jobs if Liberty fails.
“All options are on the table,” including nationalisation.
Sanjeev Gupta remains indefatigably upbeat but, to many, it looks like the walls are closing in and that Liberty Steel will inevitably end up in administration sooner or later.
“On the contrary,” Gupta retorts. “Greensill went down. It was concentrated risk on one lender, we are suffering as a result of that but our business is sound and it will find refinance”.