Nationalisation ‘least likely’ option for Liberty Steel, UK minister says

The UK business secretary has refused to rule out nationalising the plants of Liberty Steel.

Kwasi Kwarteng has admitted it was the “least likely” option less than 24 hours after Liberty Steel’s parent, GFG Alliance, revealed it plans for a new refinancing deal.

Appearing before the the business, energy and industrial strategy committee, Mr Kwarteng told MPs: “The issue that Liberty had was to do with financial engineering, the opaque bit, if you like, of GFG, the leverage, the finance, the debt they had incurred.

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“Without that I think there is a healthy interest in the assets and I think they have a viable future.

Sanjeev Gupta, the head of the Liberty Group is looking for a buyer for several UK plantsSanjeev Gupta, the head of the Liberty Group is looking for a buyer for several UK plants
Sanjeev Gupta, the head of the Liberty Group is looking for a buyer for several UK plants

“I don’t rule anything in or out, but I think that nationalisation – of all the options – is the least likely.”

His comments come after GFG Alliance revealed it held crunch talks with Credit Suisse, a key lender, in Dubai over the weekend.

Liberty Steel tycoon Sanjeev Gupta is also looking for a buyer for several UK plants, which together employ more than 1,500 people.

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Labour MP Nick Smith has demanded assurances the UK Government were ready to step in.

He said: “Across the country 5,000 families rely on the company [Liberty Steel].

"We now need the government to ensure that these plants remain open and crucially provide the finance to bridge a transition period should a new buyer or state purchase be necessary and of course work with the trade unions to test the commitment of any new buyers. If promises are broken, will the Secretary of State step in with the finance to support our steel communities?”

The failure of Greensill had left many fearing thousands of jobs could be at risk, including those at the Lochaber aluminium smelting plant, to which the Scottish Government has provided a £575 million guarantee, and the steel plant in Motherwell which received a £7m loan from Scottish Enterprise in 2017, which has yet to be repaid.

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Mr Gupta is now facing an investigation by the Serious Fraud Office (SFO), with questions also being asked of the Scottish Government over its deal with Liberty Steel.

The SFO is looking into suspected fraudulent trading and money laundering at companies in the GFG Alliance, as well as the financing that was provided by Greensill, which entered administration in March.

Former Cabinet secretary Fergus Ewing insisted to MSPs in March that Liberty Steel’s Scottish companies were financially sound despite the collapse of Greensill.

Mr Kwarteng also insisted the government was “committed” to a UK steel industry.

He replied: “There were serious concerns about corporate governance for this company and it’s something that I think members of the party opposite should do well to understand how to manage with care public finances.

"Having said all of that, I am monitoring the situation closely and I remain strategically committed to a steel industry in this sector.

“I’ve committed to a strategic presence in the UK of steel. I think it’s vitally important and as Secretary of State I will always promote that within government.”

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