Photographer: Ioana Epure / Bloomberg
Photographer: Ioana Epure / Bloomberg
British officials are planning contingency plans in case the government needs to step in to save Sanjeev Gupta’s Liberty Steel from collapse, amid fears that thousands of jobs in an industry that has failed semi-important at risk.
Industry Secretary Kwasi Kwarteng and other senior officials have been holding intensive talks with the company over the past few days, aiming at ensure the future of the steelmaker, according to people familiar with the matter.
A number of potential contingency plans are being considered, including one that would involve the government running the company with state money while seeking a buyer, he said. the people, wanting not to be identified as the conversations were not made public. No decision has been made, the company is still loose and has not sought special help.
There have been doubts about the future of Liberty Steel with the release of Greensill Capital, Gupta’s largest lender GFG Alliance, of which Liberty is a part. GFG employs around 5,500 people at more than 30 sites in the UK, including nearly 3,000 at Liberty.
“The government is closely monitoring developments around Liberty Steel and continues to liaise closely with the company, the UK steel industry and trade unions in general,” a government spokesman said in a statement. email report. “Recognizing that the pandemic has had a major impact on the entire UK economy, including steel producers, our unparalleled package of support is available with the sector to protect jobs and ensure that the right support from producers during this challenging time. “
A spokesperson for GFG declined to comment.
Kwarteng recently said that while the government may be willing to intervene, it cannot expect or promise support of any kind. The management of the company is designing the possible solutions.
Nevertheless, ministers are clear that state money may have to be invested to acquire a company that is strategically and politically important for the Boris Johnson government. In 2019, ministers came in to support British Steel using state money to keep jobs going at a cost of £ 600 million. The Financial Times reported earlier that ministers were considering reiterating this policy with Liberty.
One of the reasons ministers are urging Liberty to continue is to avoid closing the steel bars – because restarting is a long and expensive process.
The British aerospace industry has been concerned about revealing any problems that could affect Liberty, which is one of its specialist suppliers. Rolls-Royce Holdings Plc said last month it was exploring long-term alternatives in case it has to source steel from other suppliers.
– Supported by Eddie Spence