Steel tycoon Sanjeev Gupta has reportedly made a fresh bid for government support for his ailing GFG Alliance, hitting out at “misinformed… public and media commentary” on the firm’s practices.
The Sunday Times reported that Gupta had last week written to business secretary Kwasi Kwarteng seeking ministers “co-operation” on a deal.
It comes after officials rejected an initial bid for a £170m bailout for the family conglomerate, which owns a dozen metalworks in the UK under the Liberty Steel brand.
When questioned on the issue by fellow MPs, Kwarteng said that, given the lack of transparency around GFG Alliance, approving the bailout would be “deeply irresponsible”.
In his latest letter, Gupta sought to address officials’ concerns, saying that he was “full transparency” so the government could “consider all options that could establish a sustainable future for GFG Alliance businesses in the UK”.
The future of the firm has been under intense scrutiny since the collapse of Gupta’s main financier Greensill.
Concern over the business empire’s exposure to the supply chain finance provider, which was reportedly around $5bn, was a key factor in the bank’s collapse.
“The collapse of Greensill presents a financial dynamic which currently prevents working capital support from being provided to our UK businesses,” the letter read. “We continue to seek your co-operation.”
It also said 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 wrote that “innuendo and misinformed public and media commentary” had slowed down attempts to arrange new financing.
He wrote that reports that the firm had asked for a bailout were wrong. According to the Telegraph, £170m is the amount GFG needs to cover its operating losses and stay afloat.
To do so, Gupta 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.
“It is also 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,” his follow up letter said.
“The letter did not, as has been suggested and reported, request public funds be provided to any Liberty Steel business. There was explicit acknowledgement and acceptance that any options for co-operation that might be explored had taxpayer protection.”
There have been multiple reports of dubious working practices at GFG Alliance, leading MP Richard Fuller to call for a Serious Fraud Office investigation into the firm.
GFG Alliance declined to comment.