Britain’s business minister on Tuesday confirmed that Boris Johnson’s government had refused a £170 million rescue package for billionaire Sanjeev Gupta’s steel group due to his business empire’s “very opaque” structure.
Kwasi Kwarteng told the BBC that Liberty Steel, which groups Gupta’s steel activities, was a “national asset” employing around 3,000 people in Britain but that the government could not pump money into “a black box”.
He called the structure of Liberty’s owner — Gupta Family Group (GFG) — “very opaque” and “not helpful”.
“We are custodians of taxpayer’s money… and we feel that if we gave the (£170 million, $235 million, 200 million euros) money, there was no guarantee that the money would stay in the UK and would protect British jobs,” he said.
However, he added that “all options” were being considered to save Liberty Steel’s UK plants and jobs, including nationalisation.
“We think that the steel industry has a future in the UK,” said Kwarteng, despite the govenment’s planned decarbonisation of the economy.
There is growing concern in Britain about the future of GFG and Liberty Steel, which together employ around 5,000 people domestically and 35,000 worldwide.
Its financial situation has been strained by the bankruptcy of key backer Greensill, which provided short-term loans to companies by paying invoices in advance for a fee.
Since the bankruptcy, GFG has had difficulty obtaining new liquidity, even though the group says it has sufficient funds for its current needs.
GFG also employs almost 2,500 people in France, where Liberty Steel directly oversees the Ascoval steel plant in Saint-Saulve and a rail plant in Hayange.
GFG also owns an aluminuim site in Dunkirk.
In Britain, the group is also suffering from a drop in demand for certain steels from the aviation sector, which is in crisis due to the coronavirus pandemic.
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