Metals magnate Sanjeev Gupta has put three of his UK steel plants up for sale as part of a wider restructuring and has held talks with Credit Suisse on a potential standstill deal over $1.2bn in debt.
Gupta’s GFG Alliance said it was seeking to sell a speciality steel plant at Stocksbridge in Yorkshire and smaller plants at Brinsworth and West Bromwich, as it tries to stave off a collapse of the wider group.
The group has been hit by the failure of its main lender, Greensill Capital, and by suspicions of fraud, denied by the company, that are being investigated by the Serious Fraud Office. The SFO and National Crime Agency have also been scrutinising Wyelands, the retail bank owned by Gupta, said Andrew Bailey, the Bank of England governor.
Stocksbridge, which makes high-grade speciality steel and alloys for customers in the aerospace and defence and automotive sectors, was not core to the company’s vision of producing “green steel”, the company said. It is also selling two engineering businesses with sites in Essex and Kidderminster. Between them, the plants for sale employ about 1,500 people. GFG’s steel operation, branded Liberty Steel, is Britain’s third-largest steelmaker. The company said it would focus instead on its larger operations at Rotherham, which use electric arc furnaces to produce recycled steel.
Community, GMB and Unite, the steelworkers’ unions, said they were encouraged by the apparent progress in talks but added “we urgently need a solution to inject cash into the UK arm of Liberty.
The trade unions will hold Sanjeev Gupta to his promise that none of our steel plants will close on his watch, the unions added. Kwasi Kwarteng, business secretary, said workers faced “significant uncertainty”. The government was, however, “ready to support Liberty Steel’s dedicated employees and their families affected by any developments”.
Ed Miliband, the shadow business secretary, said it was vital the government and Liberty “secure legal assurances that the Stocksbridge plant . . . will remain open and the workforce will be protected”. Gupta held talks with Credit Suisse in Dubai at the weekend.
