Boris Johnson 'very hopeful' Liberty Steel will be saved as boss admits it owes 'billions'

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Boris Johnson has said that he is ‘very hopeful’ a solution can be found to save Liberty Steel plants in the UK.

Speaking during a visit to Middlesbrough, the Prime Minister said that Business Secretary Kwasi Kwarteng was in ‘daily contact’ with the firm’s owners.

“I think British steel is a very important national asset. I think the fact that we make steel in this country is of strategic long-term importance,” he said.

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“We have learned during the pandemic that it is not a good idea to be excessively reliant in times of trouble on imports of critical things.

Liberty boss Sanjeev Gupta, right, and Prince Charles on a visit to Speciality Steels in Rotherham.Liberty boss Sanjeev Gupta, right, and Prince Charles on a visit to Speciality Steels in Rotherham.
Liberty boss Sanjeev Gupta, right, and Prince Charles on a visit to Speciality Steels in Rotherham.

“We need a strong steel industry. I am very hopeful that we will get a solution.

“It would be crazy if we were not to use this post-Brexit moment not to use the flexibility we have to buy British steel. So that’s want we want to do.”

Labour has called on ministers to provide clarity on the future of Liberty’s 12 UK plants amid fears thousands of jobs could be lost if the firm goes under. It employs 1,600 at sites in Rotherham and Stocksbridge and 5,000 in the UK.

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This week, Mr Kwarteng refused to rule out taking the company into public ownership, saying ‘all options are on the table’. Earlier, he turned down a request by Liberty’s parent company, GFG Alliance, for a £170 million bailout.

Reinforcement bar production at Liberty Steel in Rotherham.Reinforcement bar production at Liberty Steel in Rotherham.
Reinforcement bar production at Liberty Steel in Rotherham.

It comes as the Liberty Steel founder Sanjeev Gupta revealed the company owes ‘many billions’ to collapsed financial backer Greensill Capital. But he insisted none of its plants will shut down ‘under my watch’.

And he claimed there was a ‘huge amount of interest’ from new financiers

Speaking on BBC Radio 4’s Today programme, Mr Gupta was asked how much Greensill was owed.

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He said that “given the legal disputes we have with them, I can’t talk specifics”, but added “it is in many billions”.

Liberty Steel is “currently enjoying one of the best markets in steel and aluminium”, he added 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.

Most staff at Stocksbridge and Rotherham are on furlough to save cash while bosses seek to refinance the company.

Liberty Steel has been hit by a ‘perfect storm’ of pandemic, Brexit, high energy prices and the collapse of lender Greensill Capital.

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.”

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Thank you. Nancy Fielder, editor.