Johnson on Liberty Steel: we will use the freedom of Brexit to find a solution

LONDON (Reuters) – British Prime Minister Boris Johnson said on Thursday he had high hopes the government could find a solution for Liberty Steel, which is struggling to raise capital after the collapse of its biggest lender, Greensill Capital.

FILE PHOTO: The Liberty Steel flag flies over the steelworks in Dalzell, Scotland, Britain April 8, 2016. REUTERS / Russell Cheyne

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 granted multibillion dollars in loans.

When asked if he would step in to make sure no jobs are lost at Liberty Steel, Johnson said: “I think British steel is a great national asset and the fact that we are making steel. ‘steel in this country is of long-term strategic importance.’

“I am optimistic that we will find a solution,” he said. “It would be crazy not to take advantage of this post-Brexit moment, 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 has shown how important it is not to overly depend on imports of critical items.

He said the government’s infrastructure plans, including wind farms, railways and nuclear power plants, would all need steel.

CONCERNS

Liberty Steel owner Sanjeev Gupta has urged creditors not to pull the plug, saying it has generated huge interest from financiers willing to refinance billions of dollars in debt to Greensill. He gave no details on specific offers.

Gupta said it was natural for lenders to want to protect their position, adding that there had been positive discussions with Grant Thornton, administrator of Greensill.

“It makes no sense for them or for any of the creditors to destroy jobs, but mostly to destroy value because it is the value that will give them the recovery,” Gupta, 50, told the radio. from the BBC.

The steelmaker has requested an emergency loan of 170 million pounds ($ 234 million) in the wake of the Greensill collapse.

But UK Business Secretary Kwasi Kwarteng said on Tuesday he was concerned about the “opaque structure” of the GFG and that there was no guarantee that financial support would remain in the country.

Gupta said he saved thousands of jobs at UK steelworks. Asked about the government’s concerns, he said a key issue was that Greensill had the security of many Liberty assets.

He said his global operations were profitable overall and that he would support his UK business.

“None of our steel plants under my supervision will be closed,” he said.

(1 USD = 0.7273 pounds)

Reporting by Guy Faulconbridge; edited by William Schomberg and Jason Neely


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