Chunks of embattled industrial entrepreneur Sanjeev Gupta’s Liberty
Steel could be bought by Jingye, the Chinese conglomerate that acquired
British Steel out of liquidation.
Jingye has told the Government it would be interested in parts of
Liberty, which has about 3,000 steelmaking staff in the UK, should Mr
Gupta’s GFG empire fail to secure new funding.
Government sources confirmed to The Telegraph that Jingye has told them
it would consider taking on parts of Liberty. They are most likely the
speciality steels business that produces critical parts for aerospace
industry customers such as Rolls-Royce and is regarded as a strategic
business for the UK.
GFG - the parent group of Mr Gupta’s sprawling businesses which include
Liberty - is fighting for its life after losing its main source of
funding the its main source funding with the collapse of Greensill
Capital in March.
Greensill went into administration because of concerns about its
concentration of lending to GFG, with a Credit Suisse fund pulling
backing for GFG and the lender struggling to get credit insurance.
Mr Gupta is desperately seeking fresh funding to keep his businesses
running. Liberty, Britain’s third-largest steel maker, has been forced
to halt or slow production because of cashflow contraints.
Jingye swooped on British Steel in 2019 after it collapsed into
administration. The new owner promised more than £1bn of investment in
the business to improve productivity and increase production.
However, the process have been delayed by the move towards
decarbonisation, which has made plans to invest in British Steel’s
highly polluting existing blast furnaces less attractive.
One government source said Jingye was far from alone in indicating its
interest in Liberty, adding “as have lots of companies”.
The Business Secretary, Kwasi Kwarteng, has repeatedly said the
Government will do “all it can” to support the steel industry yet has
refused to say whether he would prop up Liberty, and refused a request
for £170m taxpayer-backed rescue two months ago.
Insiders have hinted that ministers will not act to aid Liberty before
it goes into administration, possibly copying the model adopted with
British Steel. It was taken over by the Official Receiver and bankrolled
by the state until a buyer was found. The process lasted almost a year
and cost the taxpayer £588m.
A spokesman for Jingye said: "We do not comment on commercial
enquiries”.
Source from Telegraph |