The principal financial backer of one of the UK’s largest industrial groups has fallen into administration.
Specialist bank Greensill Capital was the main lender to businessman Sanjeev Gupta’s sprawling empire, which includes Liberty Steel.
The appointment of administrators to Greensill puts 5,000 jobs at risk at Liberty Steel and other firms.
In a court filing, Greensill said Mr Gupta’s operations were in “financial difficulty” and defaulting on debt.
Mr Gupta declined to comment on the claims, but his business GFG Alliance earlier said that it had adequate funding for its current needs.
Union officials held crisis talks with the steel magnate on Tuesday. Liberty owns 12 steel plants in the UK including in Rotherham, Motherwell, Stocksbridge, Newport and Hartlepool.
Afterwards the Community union said: “Sanjeev Gupta needs to tell us exactly what the administration means for Liberty’s UK businesses and how he plans to protect jobs. The future of Liberty’s strategic steel assets must be secured and we are ready to work with all stakeholders to find a solution.”
A spokesperson for Grant Thornton said its insolvency practitioners Chris Laverty, Trevor O’Sullivan and Will Stagg had been appointed as joint administrators of Greensill Capital and Greensill Capital Management Company.
“The joint administrators are in continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets. As these discussions remain ongoing, it would be inappropriate to comment further at this time,” the spokesperson added.
Mr Gupta, who has been called the “saviour of steel”, has defied pessimists in the industry for years by buying up seemingly unloved industrial assets.
These included steel and aluminium plants that many thought could not be run profitably in the face of cut price competition from China.BUSINESS NEWS • ECONOMIC NEWS • MAKE MONEY • News