Fears for thousands of British steel jobs as Sanjeev Gupta’s Australian business crumbles
Fresh fears have been raised about UK steel jobs after Sanjeev Gupta’s empire was thrown deeper into crisis.
Two of the tycoon’s businesses in Australia face being shut down as pressure mounts on his GFG Alliance.
The strain puts his operations in other countries including the UK at risk – he employs around 5,000 people in the UK including 3,000 at Liberty Steel.
Jobs fears: Sanjeev Gupta employs around 5,000 people in the UK including 3,000 at Liberty Steel
The 49-year-old owns steel plants in Rotherham, Stocksbridge, Newport and Hartlepool.
But GFG has been struggling since the collapse of Greensill Capital, which specialised in supply chain finance and was the biggest lender to GFG.
Gupta is scrambling to raise cash to keep his empire, which employs 35,000 staff, afloat. The collapse of Greensill – triggered by its exposure to GFG – saddled backer Credit Suisse with heavy losses.
The lender is now trying to wind up two of Gupta’s GFG businesses in Australia to recoup cash. GFG has vowed to fight Credit Suisse in the courts, saying it does not conduct any financing with the lender.
Credit Suisse has targeted several GFG firms in the UK. Last week, the Swiss investment bank filed papers to wind up a trading company, Liberty Commodities.
Lenders can apply to a court and ask it to close a company that owes them money. If successful, the assets can be sold to repay the debts.
Although Gupta has pledged not to close a single UK plant, Whitehall officials are lining up administration and other rescue plans.
GFG said: ‘The Australian businesses are performing well and generating positive cash flow, supported by the operational improvements we’ve made.