Metro Bank is reportedly still waiting for the repayment of an £18m loan from embattled steel group Liberty.
It is the latest sign of trouble for Liberty’s owner GFG Alliance which is being investigated by the UK Serious Fraud Office for alleged money laundering and fraudulent trading.
Its future has been in doubt since its main backer, supply chain finance firm Greensill Capital collapsed into administration in March.
But its troubles started some time earlier, with a loan secured on the steelworks as early as 2018, the BBC reported.
Filings at the Isle of Man Companies Registry show that it’s one of a portfolio of industrial properties, including another factory in South Wales, which were pledged as security for an £18m loan from Metro Bank.
Liberty’s accounts for 2018-19 say that “due to breaches of… covenants and restrictions, Metro bank have called in the [loan] facility and have stipulated that full repayment must be made” by 31 March 2020.”
A GFG Alliance spokesman declined to say what caused the terms to be breached and added: “no loan terms have been breached due to non-payment” and “discussions are ongoing and are being resolved.”
On Saturday it emerged Indian steel giant JSQ Steel is mulling a bid for Liberty, although no final decision has yet been taken, according to Reuters.
If such an offer were made and accepted, it would mark yet another foreign takeover of a part of the UK’s steel sector.
Sanjeev Gupta, GFG’s founder, continues to attempt to refinance his empire following Greensill’s collapse.
Ministers have said they will not step in until Gupta has finished his attempts to refinance the firm. But any change of ownership of Liberty Steel is likely to be politically sensitive.
The government said it was “closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader UK steel industry and trade unions”.