Government rejects Liberty Steel's request for £170m bailout

29th Mar 2021, 13:03 • In News

The government has rejected a £170 million request for financial support for Liberty Steel, which employs 3,000 staff in the UK.

The government has rejected a £170 million request for financial support for Liberty Steel, which employs 3,000 staff in the UK.

Company founder Sanjeev Gupta sent a letter last week to the Department of Business asking for help to absorb recent losses and pay day-to-day operating expenses.

It is understood that the government refused the loan because there were concerns about the opaque nature of Mr Gupta's businesses, and whether the UK taxpayer money would end up funding business operations in other countries.

Government sources have indicated it was unlikely government support would be offered to the company with its current structure and management, with any assistance likely to come after an administration process.

Liberty's GFG employs 5,000 staff at 12 sites in the UK, which include Rotherham, Motherwell and Newport.

GFG's key financial backer, Greensill Capital, recently filed for insolvency.

"The collapse of Greensill has put financial pressure on the GFG Alliance and our British steel operations," Mr Gupta writes in the letter.

"We are still refining the details with my management team and our external advisors, but preliminary indications are that the steel manufacturing and processing operations would need in the range of £170m to fund working capital and some additional capital to fund operating losses in the short term, which we are in the process of finalising."

Liberty Steel www.libertysteelgroup.com

Author

Michael Tyrrell

Company

GFG Alliance