Steel tycoon Sanjeev Gupta has reportedly made a fresh appeal for government support for his falling GFG Alliance. Media reports suggest he wrote to business secretary Kwasi Kwarteng last week, seeking “co-operation” from ministers on a deal. The renewed bid comes after government officials rejected an initial bid for a £170m bailout for the family conglomerate.
In his latest letter, Gupta reportedly sought to address officials' concerns, saying that he has “full transparency” so the government could “consider all options that could establish a sustainable future for GFG Alliance businesses in the UK.” The firm has been under intense scrutiny ever since the collapse of Gupta's main financier Greensill opened up a can of worms.
Gupta's letter read, “The collapse of Greensill presents a financial dynamic which currently prevents working capital support from being provided to our UK businesses. We continue to seek your co-operation.” It also states that talks with prospective new lenders were progressing well and “should allow full repayment for creditors and fresh group funding in a number of jurisdictions.” Gupta also lashed out at “innuendo and misinformed public and media commentary”, stating that it had slowed down attempts to arrange new financing.
He urged officials to set up an investment structure using a so-called “tolling” arrangement, which would rescue his company through the purchase of scrap that its electric arc furnaces could convert into finished products. His follow-up letter said, “It is also incumbent on me to correct any misunderstanding that may exist about the intent or contents of the letter of March 24 which continues to be misrepresented.”
Meanwhile, when questioned by fellow MPs, Kwarteng reportedly said that considering the lack of transparency around GFG Alliance, approving the bailout would be “deeply irresponsible”.
Tata reportedly sues GFG Alliance
Meanwhile, Gupta's empire is reportedly being sued by rival Tata Steel over a £100m deal that turned him into one of Britain's biggest steel magnates. A report by the Daily Telegraph states Tata has filed a commercial court claim against Liberty Steel's parent company Gupta's GFG Alliance, over alleged mispayments.
The case relates to Liberty's 2017 takeover of Tata's Rotheram-based specialty steel division. Once called a saviour for saving over a 1,000 jobs in Rotheram, Liberty Steel is now in a mess following alleged reduction of cash sum by around a quarter through several arrangements, including deferred payments.
