British Prime Minister Boris Johnson said on Thursday he was very hopeful the government could find a solution for Liberty Steel which is scrambling to secure capital after the collapse of its biggest lender Greensill Capital.
The steelmaker, which employs 3,000 people in Britain and is part of the GFG Alliance conglomerate, has been rocked by the failure of Greensill, which had extended many billions of dollars in loans.
Asked if he would step in to ensure no jobs would be lost at Liberty Steel, Johnson said: “I think that British steel is a great national asset and the fact that we make steel in this country is of strategic long-term importance.”
“I’m very hopeful that we’ll get a solution,” he said. “It would be crazy if we were not to use this post-Brexit moment, to not to use the flexibility we have, to buy British steel. So that’s what we want to do.”
Johnson said the COVID-19 crisis had shown how important it was not to be excessively reliant on imports of critical items.
He said the government’s infrastructure plans including wind farms, railways, nuclear power stations would all need steel.
Liberty Steel owner Sanjeev Gupta urged creditors not to pull the plug, saying he had garnered huge interest from financiers willing to refinance billions of dollars in debt owed to Greensill. He did not give details on any specific offers.
Gupta said it was natural that lenders wanted to protect their position, adding there were positive discussions with Grant Thornton, administrator for Greensill.
“It makes no sense for them or any of the creditors to destroy jobs, but more importantly to destroy value because that is the value which will give them the recovery,” Gupta, 50, told BBC radio.
The steelmaker, sought a 170 million pound ($234 million) emergency loan following the collapse of Greensill.
But Britain’s Business Secretary Kwasi Kwarteng said on Tuesday he was worried about the “opaque structure” of GFG and that there was no guarantee any financial support would stay in the country.
Gupta said he had saved thousands of jobs at British steel plants. When asked about the government’s concerns, he said one key problem was that Greensill had security of many of Liberty’s assets.
He said his global operations overall were profitable and that he would support his UK businesses.
“None of our steel plants under my watch will be shut down,” he said.