Steel Worker Unions Fear Job Losses in UK on Greensill Crisis
BBC reported that following the emergence of financial problems for Mr Sanjeev Gupta's Liberty Group, owner of steel plants at Rotherham,
BBC reported that following the emergence of financial problems for Mr Sanjeev Gupta's Liberty Group, owner of steel plants at Rotherham, Stocksbridge, Newport and Hartlepool employing 3,000 direct steel employees and a further 2,000 in engineering businesses, worker union sources are very concerned about the potential risk to thousands of UK steel and engineering jobs. A spokesperson for steel union Community told BBC "There's no doubt these reports are concerning and, on behalf of our members, we are pressing the company for answers. Liberty Steel UK is a crucial strategic business and we are ready to work with the company and the government to secure the business and protect jobs."
Mr Harish Patel from Unite told the BBC what many in the industry have feared for some time. He said "Unite has always been concerned about the financial basis that Liberty Steel is based on. The latest concerns about the future of Greensill and Sunjeev Gupta's refinancing difficulties are deeply alarming and Unite will be seeking urgent reassurances about the health of the business units in the UK."
However a GFG Alliance spokesman said "GFG Alliance has adequate funding for its current needs and its refinancing plans to broaden its capital base and obtain longer term funding are progressing well. Our global efficiency drive means that our core businesses are operationally strong. We are benefiting from a recovery in steel and aluminium markets which means that most of our businesses are running at near full capacity to meet high demand and are generating positive cash flows."
Mr Gupta was hailed as saving thousands of UK jobs when he stepped in to buy up plants and processing facilities that seemed on the brink of going bust. But his financial arrangements have always been shrouded in secrecy and controversy. One of Mr Gupta's primary sources of finance is a group called Greensill Capital, run by former investment banker Mr Les Greensill who counts former Prime Minister Mr David Cameron among his paid advisers. Greensill's exposure to Mr Gupta's business prompted the Swiss investment bank Credit Suisse to freeze withdrawals from up to GBP 10 billion worth of funds held as security. Connections between Greensill Capital and international money manager GAM saw a senior manager at GAM forced to resign over allegations of poor risk management and due diligence over billions in loans to Mr Gupta's empire. Sources close to the situation told the BBC that Greensill is in serious financial trouble and that it would not be wrong to surmise that it is likely to go into administration.