Nationalisation is Least Likely Option for Liberty Steel
Sky News reported that UK’s Business Secretary Mr Kwasi Kwarteng has told Business, Energy & Industrial Strategy committee’s MPs that nationalising UK
Sky News reported that UK’s Business Secretary Mr Kwasi Kwarteng has told Business, Energy & Industrial Strategy committee’s MPs that nationalising UK steel plants owned by Mr Sanjeev Gupta is the least likely option for ensuring production continues. Mr Kwarteng said Liberty's plants are good assets with a viable future. He said “The issue that Liberty had was to do with financial engineering, the opaque bit, if you like, of GFG, the leverage, the finance, the debt they had incurred. Without that I think there is a healthy interest in the assets and I think they have a viable future. I don't rule anything in or out, but I think that nationalisation, of all the options, is the least likely."
Labour MP Nick Smith has demanded assurances the UK Government is ready to step in. He said: “Across the country 5,000 families rely on the company. We now need the government to ensure that these plants remain open and crucially provide the finance to bridge a transition period should a new buyer or state purchase be necessary and of course work with the trade unions to test the commitment of any new buyers. If promises are broken, will the Secretary of State step in with the finance to support our steel communities?”
The business secretary also defended COVID support loans provided last autumn to Mr Gupta's now defunct Wyelands Bank, following concerns raised by the Bank of England Governor Andrew Bailey. He said "When these loans were made there were not concerns about this particular bank. British Business Bank was under a lot of pressure to distribute loans, we had to keep liquidity going.”
Liberty Steel employs around 3,000 workers in the UK, jobs that have been under threat as a result of GFG's reliance on Greensill, which is now the subject of a Serious Fraud Office inquiry. GFG Alliance group has put Liberty Steel plants in Stocksbridge, Brinsworth and West Bromwich up for sale following talks with Credit Suisse, which lost an estimated GBP 1 billion when GFG's main lender Greensill Capital went bust earlier this year.
In 2019 when British Steel collapsed into administration, the government provided almost GBP 600 million to allow plants to be run by the Official Receiver and continue production for five months until a sale to Chinese firm Jingye was agreed.