Liberty Steel is the third largest steel producer in Britain. The company also operates in the Czech Republic, where it owns the Liberty Ostrava metallurgical company.
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The parent company GFG Alliance, backed by British Indian businessman Sanjeev Gupt, must now seek a new source of funding after its main creditor, Greensill Capital, declared insolvency last week.
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Liberty Steel operates 12 steel mills in the UK and employs 5,000 people. Britain’s shadow business minister, Ed Miliband, said this week that the government should consider all possible ways to save the steelworks, including possible nationalization.
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According to France Télécom, unnamed government officials said that one of the options to be rescued was to use public funds to maintain production in a similar way to the British government’s support for British Steel the year before. At the time, this aid cost taxpayers almost £ 600 million (roughly £ 18 billion).
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According to court documents, GFG stated in a February letter that if Greensill stopped providing it with working capital, it would go into insolvency. However, the GFG continues to seek to secure an alternative source of funding. Gupta said last week that the GFG was “operationally strong” and that negotiations on new funding were developing favorably.
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British unions are urging the government to provide British Liberty Steel employees with the same guarantees that the French government has provided to workers at GFG’s French plants. French Finance Minister Bruno Le Maire said last week that the government was ready to come to the rescue if needed.
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“We want the Minister of Business to confirm that he will intervene if necessary. Liberty Steel is a strategic company and a major employer, ”said British trade unions. The British government, according to its press representative, “closely monitors developments around Liberty Steel” and remains in close contact with the company and the wider steel industry and unions.
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The Liberty Ostrava metallurgical company has been a part of Liberty since 2019, the group bought it from the competing steel producer ArcelorMittal. According to the website, Liberty Ostrava, together with its subsidiaries, has 6,000 employees.
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According to Trinity Bank analyst Lukáš Kovanda, it is currently unlikely that in the event of the fall of Gupt’s empire, there will be anyone interested in quickly taking over the Ostrava company.
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“At the time of the takeover of the Ostrava smelters, the head of the largest trade unions in the country, Josef Středula, expressed considerable doubts about the real intentions of Gupt’s company, he was worried about the future of ordinary smelters. The current situation can fulfill these concerns, “he added.
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