Liberty Steel’s UK finance chief has today told MPs that parts of the metals group are “challenged” as Sanjeev Gupta’s company seeks to refinance the business.
Since the collapse of chief financial backer Greensill Capital in March, Gupta’s GFG Alliance – of which Liberty Steel is a part – has been racing against its creditors to secure new financing.
In an awkward appearance before the parliamentary business committee, Anton Krull, who was forced to confirm he was the firm’s chief financial officer after failing to answer a number of questions, admitted that some of Liberty Steel’s assets were facing challenges.
“I would say probably the larger businesses are challenged, and some of the smaller businesses are operating reasonably profitably,” he said.
Krull blamed this on problems facing the wider UK steel industry.
However, he added that a government bailout was not Liberty Steel’s preferred option, despite calls for such a move from MPs, unions, and trade bodies.
The government should play a role in creating an “enabling environment” for the recapitalisation of the firm, he clarified. Over 3,000 jobs are at risk should Liberty Steel UK collapse.
Business secretary Kwasi Kwarteng has said that such a step would only come after Gupta had exhausted attempts to refinance his firm.
His evidence came after Sky News revealed that another of Gupta’s businesses, Liberty Aluminium Technologies (LAT), was in talks with Close Brothers in a bid to avoid administration.
Both Krull and board member John Bolton also expressed surprise that they had been chosen to discuss Liberty Steel’s financial position.
He also admitted to not having had dealings with King & King, a firm of chartered accountants who have audited many of Gupta’s firms.
The steel tycoon’s business practices have attracted a lot of scrutiny since the collapse of Greensill, with the Serious Fraud Office (SFO) already having launched a probe into his conglomerate.