Gupta signals break up of steel empire: Crisis sparks fresh fears for 3,000 jobs at plants across the UK
Sanjeev Gupta has signalled the break-up of his steel empire in a move that throws Britain’s struggling industry deeper into crisis.
The tycoon has appointed four new directors at Liberty Steel to lead a committee that will be given the freedom to sell underperforming parts of the company.
This will raise fears that Liberty’s UK arm could be split up and sold off. Gupta’s wider group of business, the GFG Alliance, which includes Liberty, has been on the brink since its main lender Greensill Capital went bust at the start of March.
Sell-off: Sanjeev Gupta (pictured) has appointed four new directors at Liberty Steel to lead a committee that will be given the freedom to sell underperforming parts of the company
GFG employs 5,000 people in the UK, 3,000 of whom work at Liberty’s 12 plants.
One of the appointments to the panel will raise eyebrows.
Iain Hunter, who will be Liberty’s chief governance officer, for years led GFG’s controversial bank Wyelands which has been forced to return money to its customers by the Bank of England.
Gupta, who was dubbed the ‘saviour of UK steel’ after a spending spree that started in 2013 and saw him buy factories in Newport, Stocksbridge and Hartlepool, has been scrambling to secure new financing since Greensill’s collapse.
But yesterday’s announcement was the most explicit indication yet that Liberty might not survive the crisis intact.
Liberty said: ‘The restructuring and transformation committee will be given full autonomy to restructure Liberty’s operations to focus on core profitable units, and either fix or sell underperforming units.’
The news came as GFG revealed its finance director is quitting after around a year and a half in the post.
V Ashok will leave at the end of May for personal reasons after spending months firefighting the conglomerate’s near financial collapse.
Gupta was dubbed the ‘saviour of UK steel’ after a spending spree that started in 2013 and saw him buy factories in Newport, Stocksbridge and Hartlepool (pictured)
Dubai-based businessman Deepak Sogani will take over from Ashok on an interim basis across GFG as a whole – but has also been appointed as Liberty’s finance chief and will be one of four executives on the restructuring committee.
Gupta has made the surprise move of bringing on long-time colleague Hunter, who oversaw the sale of the former Tungsten Bank to Gupta in 2015, later turning it into Wyelands, which he led until late last year.
But its reputation has nosedived since and, in an unprecedented intervention in March, Wyelands was forced by the Bank of England to return money to 4,000 retail savers.
The restructuring panel will also include Jeff Kabel, who once worked at JP Morgan and is chairman emeritus of the International Steel Trade Association, as chief transformation officer, and turnaround expert Jeffrey Stein joins as restructuring chief.
Steel unions demanded more details about how the plans would affect UK workers.
A spokesman for union Community said: ‘We are seeking urgent clarification on the implications of this announcement.
‘Sanjeev Gupta has promised to keep every UK steel plant open and we expect him to honour that commitment.
‘The future for all the UK businesses must be secured.’ The Government has already turned down a request for a £170million bailout because it said it could not be sure the money would stay in the UK and not be sent overseas to help another part of the GFG empire.
Liberty also announced that it had secured new funding for its operations in Australia, with the sprawling Whyalla Steelworks clinching a cash injection from California-based White Oak Global Advisors.