Britain is allowing owner Sanjeev Gupta to explore refinancing options for Liberty Steel before offering any potential government support, business secretary Kwasi Kwarteng said on Tuesday.
Prime Minister Boris Johnson said this month he was hopeful the government could find a solution for Liberty Steel after its biggest lender Greensill Capital went into insolvency last month.
“I think it’s absolutely necessary to have steel here in the UK, it has a future,” Kwarteng told a parliamentary hearing. “But we can’t strip Liberty Steel in this instance now from the wider group under which it sits.”
“Mr Gupta’s assurances that he can refinance his business needs to be examined and he should be allowed time to find the actual refinancing to keep his businesses afloat,” Kwarteng said.
“What I won’t rush into is giving any guarantees.”
Liberty Steel, which employs 3,000 people in Britain, said last week it was working to provide additional working capital facilities and that it had resumed partial production at one of its plants in England.
But the government rejected a request for an emergency loan of 170 million pounds ($233 million) for Gupta’s conglomerate GFG Alliance citing its global spread of operations and opaque structure.
Kwarteng reiterated on Tuesday that Britain was not prepared to provide cash to GFG.
In an insolvency filing last month, Greensill said GFG, which is its largest client, had warned in February it would “collapse into insolvency” if the supply chain finance firm stopped providing it with working capital.
Gupta has urged creditors not to pull the plug, saying he had garnered interest from financiers willing to refinance billions of dollars in debt owed to Greensill, but he has not provided details of any specific offers.