Mr Gupta Seeks UK Government Support in Fresh Bailout Bid
The Sunday Times reported that Mr Sanjeev Gupta has last week written to UK’s Business Secretary Mr Kwasi Kwarteng seeking ministers co-operation on a deal. In his latest letter, Mr Gupta has sought to address officials concerns, saying that he is full transparency so the government could consider all options that could establish a sustainable future for GFG Alliance businesses in the UK. Mr Gupta wrote “The collapse of Greensill presents a financial dynamic which currently prevents working capital support from being provided to our UK businesses. We continue to seek your co-operation. Talks with prospective new lenders were progressing well and should allow full repayment for creditors and fresh group funding in a number of jurisdictions. Innuendo and misinformed public and media commentary have slowed down attempts to arrange new financing.”
He wrote that reports that the firm had asked for a bailout were wrong. Mr Gupta urged officials to set up an investment structure using a so-called tolling arrangement, which would rescue his company through the purchase of scrap that its electric arc furnaces could convert into finished products. He wrote “It is also incumbent on me to correct any misunderstanding that may exist about the intent or contents of the letter of March 24 which continues to be misrepresented. The letter did not, as has been suggested and reported, request public funds be provided to any Liberty Steel business. There was explicit acknowledgement and acceptance that any options for co-operation that might be explored had taxpayer protection.”
It comes after officials rejected GBP 170 million bailout when Mr Kwarteng had said that given the lack of transparency around GFG Alliance, approving the bailout would be deeply irresponsible. . As per media reports, the government refused the loan because ministers had concerns over the opaque corporate structure used by GFG, as well as whether UK taxpayer money would end up funding operations in other countries. Any assistance is more likely to come following an administration process, to support UK jobs as opposed to the corporate entity that owns it.