The founder of Liberty Steel has revealed that the company owes “many billions” to collapsed financial backer Greensill Capital but insisted none of its plants will shut down “under my watch”.
Labour has called on ministers to provide clarity on the future of Liberty Steel’s UK plants amid fears that thousands of jobs could be lost if the firm goes under.
This week, Business Secretary Kwasi Kwarteng refused to rule out the prospect that the company could be taken into public ownership, saying “all options are on the table”.
Appearing on BBC Radio 4’s Today programme on Thursday morning, Liberty Steel boss Sanjeev Gupta was asked how much money was owed to Greensill.
He said that “given the legal disputes we have with them, I can’t talk specifics”, but added “it is in many billions”.
Mr Gupta said Liberty Steel is “currently enjoying one of the best markets in steel and aluminium”, and its recent efforts to make “efficiency gains” are paying “good results”.
“So, as a result, actually, we have a huge amount of interest from new financiers who are willing to back us,” he said.
He added: “Of course, given the situation, this sort of thing takes time and hence we need to find short-term solutions. But we’re not waiting for anybody. We’ve taken matters into our own hands.”
Mr Gupta said he has launched a project connected to “cash measures” plants are taking “to optimise and conserve and be careful”.
He acknowledged there are some challenges in the steel sector, such as “high energy prices”, but said the business has built its own plants to supply renewable energy to its operations.
Mr Gupta added: “Our overall global operations are profitable, we have refinancing offers, we will refinance and we will support our UK business also.
“None of my steel plants under my watch will be shut down.”
He accepted that “the UK has been a tough journey” and “labour of love”, but added that he is “committed to my UK steel plants”.
“I believe in them, they have a great future. We’ve saved thousands of jobs here. We’ve shown that economically those businesses can work,” he said.
Questioned about reports that he faces “winding-up petitions” against some of his UK companies and that “you can’t afford to pay”, he replied: “It is natural to some degree that lenders want to protect their own position.
“But we also have our position. We have committed facilities from Greensill for three years. According to us, these debts are not due.”
Mr Gupta said there have been “positive discussions” with the administrator for Greensill.
He added: “It makes no sense for them or any of the creditors to destroy jobs, but, more importantly, to destroy value, because that is the value which will give them the recovery.
“I’m very confident that we will find short-term solutions through our own efforts and will find long-term solutions through refinancing.”
Mr Kwarteng previously confirmed that ministers had turned down a request by Liberty’s parent company, GFG Alliance, for a £170 million bailout.
The company turned to the Government for support following the collapse of its main financial backer, Greensill.
The Government has also been facing questions over David Cameron’s links with Greensill when he was prime minister and subsequent lobbying on its behalf after he left office.
The firm has since filed for insolvency after failing to secure support through the Government’s Covid Corporate Financing Facility, with its collapse threatening thousands of jobs in Liberty Steel.
Asked why he had dealings with Greensill in the first place, Mr Gupta said his business’s approach of buying plants that were either shut or closing meant it could not access “normal conventional funding”.
He said Greensill’s support was “a breath of fresh air”, but added that it had been time to “move on” and “refinance away”.
Mr Gupta added that “without their help, if I’m very honest, we would not be where we are, we would not have been able to build this business which we’ve had.”
Asked if Mr Cameron did any lobbying work for him, Mr Gupta replied: “I have not had any interactions with him.”