Trouble at mill for Liberty Steel Group as Greensill Capital falls into administration, a body blow for Sanjeev Gupta, widely touted as 'the saviour of steel', and a big headache for the Government, which has held meetings with the steelmaker's CEO, John Ferriman. Nationalisation was not on the agenda, and more meetings are on the cards.
The unions, quite understandably, want to know what's going on and are calling on Gupta to explain what Greensill's administration means for Liberty's UK businesses, the key question being how will he protect jobs?
Liberty Steel is the third-largest UK steelmaker. It employs 3,000 people across 11 sites and a further 2,000 in engineering businesses within the group.
A spokesman for GFG Alliance, the umbrella business of which Liberty Steel is a part, commented: “Our operations are running as normal and our core businesses continue to benefit from strong market conditions generating robust sales and cash flows. Our operational efficiency programme has improved profitability and we are making progress in our discussions with financial institutions that can help diversify our funding. We are keeping our employees up to date and will provide further updates as we deliver our plans.”
As for Greensill's administrators, Grant Thornton, they are busy in an ongoing conversation with an interested party in relation to the purchase of certain Greensill assets, according to a BBC report.
Greensill, incidentally, lists former British Prime Minister David Cameron as a paid advisor. Cameron, of course, is most well-known globally as the serving PM who gave the British people a referendum on membership of the European Union.
The British Labour Party, currently the official party of opposition in the UK, describes the situation as 'deeply concerning' and a worrying time for Liberty's steelworkers. Even more worrying, perhaps, when you consider that Gupta's financing requirements constituted more than 50% of Greensill's lending volumes.