Representatives from British trade unions seek to meet with officials at Liberty Steel after one of GFG Alliance’s major backers signaled financial trouble by entering into administration.
On Monday, Greensill Capital filed insolvency paperwork with local courts. The financial firm lost insurance and investor funding for its own supply chain business last week.
Gupta Family Group Alliance, which operates three aluminium plants under the auspices of Alvance Aluminium, was one of Greensill’s largest clients according to an anonymous source who spoke with Reuters on Monday.
Word of the insolvency prompted several of Great Britain’s major labor unions to seek assurances from Liberty Steel regarding its own prognosis for continuing as a going concern and the security of the many jobs at the plant.
“Sanjeev Gupta needs to tell us exactly what the administration means for Liberty’s UK businesses and how he plans to protect jobs,” said a representative from one of the unions in a statement.
“The future of Liberty’s strategic steel assets must be secured and we are ready to work with all stakeholders to find a solution.”
According to a source from another trade union, the meeting is scheduled to occur tomorrow (Thursday).
Meanwhile, GFG Group had no immediate statement on the situation. The firm previously indicated that it has other funding sources waiting in the wings and that it continues to enjoy a positive cash flow.
“GFG Alliance has adequate current funds and its plans to bring in fresh capital through refinancing are progressing well,” said GFG spokesman Andrew Mitchell.
GFG is Britain’s third-biggest steel manufacturer. Sanjeev Gupta built the firm by acquiring struggling aluminium and steel assets throughout Europe, Australia, and the United States. Alvance Aluminium consists of the 40 thousand metric tons per annum aluminium smelter in Fort William, Scotland, the 284 thousand metric tons per annum aluminium smelter at Dunkirk (which is Europe’s largest), and the 200 thousand metric tons per annum aluminium rolling mill in Duffel, Belgium.