Boris Johnson has said today that he is “very hopeful” the government will be able to bail out ailing Liberty Steel, saying it “would be crazy” for the government not to buy British steel post-Brexit.
The Prime Minister said on a trip to Middlesbrough today that business secretary Kwasi Kwarteng had been in “daily contact” with Liberty Steel owner Sanjeev Gupta.
It comes as Gupta today said none of his steel plants would be shut down “under my watch”, after creditors began a court application to wind up one of his businesses.
“I think British steel is a very important national asset, I think the fact that we make steel in this country is of strategic long-term importance,” Johnson said.
“We have learned during the pandemic that it is not a good idea to be excessively reliant in times of trouble on imports of critical things.
“We need a strong steel industry. I am very hopeful that we will get a solution.
“It would be crazy if we were not to use this post-Brexit moment not to use the flexibility we have to buy British steel. So that’s want we want to do.”
Liberty Steel, the UK’s third largest steelmaker, was on the brink of collapse weeks ago when its main financer Greensill Capital went bust.
Gupta said today he had huge interest from financiers willing to refinance billions in debt owed to failed lender Greensill Capital.
The Liberty Steel owner warned creditors against pulling the plug and destroying thousands of jobs.
Bankers acting for Credit Suisse took to the insolvency court to close Gupta’s trading arm Liberty Commodities following the collapse of his lender Greensill.
There are now concerns that similar action could be taken against other businesses owned by Gupta, which employ thousands of people in the UK, according to the Telegraph.
An application to wind up Liberty’s Rotherham-based steel division could be imminent with 2,000 jobs on the line.
Speaking to the BBC this morning, Gupta said: “The future of the steel industry is very strong in the UK. None of my steel plants under my watch will be shut down, for sure.”
Gupta admitted that he owed billions of pounds to failed lender Greensill Capital, but he expected other financiers to back him.
“It is many billions, but also remember that we are one of the largest steel companies in the world, a very substantial aluminium business, and a substantial renewable energy business so it should be reflected in that light,” Gupta told BBC radio.
“Actually we have a huge amount of interest from new financiers who are willing to back us, who are willing to refinance Greensill.
“Given the situation, this sort of thing takes time and hence we need to find short-term solutions.”