The industrialist Sanjeev Gupta has struck a deal to avert the collapse of an arm of his steelmaking empire which is a key supplier to Jaguar Land Rover, the car manufacturer.
Sky News has learnt that Mr Gupta’s GFG Alliance has repaid a roughly-£10m loan from Close Brothers to Liberty Aluminium Technologies (LAT), one of its UK subsidiaries.
The repayment is understood to have taken place in the last few days although it was unclear on Thursday how Mr Gupta had secured the money to do so.
It will secure the short-term future of LAT and head off the prospect of the company’s collapse into administration, which had begun to look increasingly possible last week.
News of the repayment came as Mr Gupta announced that he would not appear before MPs as planned next week as part of their inquiry into the financing of Liberty Steel.
AdvertisementMr Gupta cited a Serious Fraud Office probe into his business empire as the reason for his decision not to give oral evidence to the business select committee on 6 July.
“I hold the UK parliament and its committees in the highest regard,” Mr Gupta said.
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The industrialist’s battle to keep Britain’s third-biggest steel producer afloat has been increasingly fraught since the collapse of its main lender, Greensill Capital, earlier this year.
On Tuesday, GFG announced a further restructuring of its operations which included the departure of its UK boss.
The reprieve for LAT, which employs 250 people at three UK sites, is unexpected, and raises questions about whether Mr Gupta has attempted to seek funding from JLR or borrowed money from another party to repay Close Brothers.
The division, which is one of many subsidiaries of Mr Gupta’s GFG Alliance group of steel, metals and industrial businesses, produces precision parts for automotive customers including JLR.
LAT, which operates from sites at Kidderminster, Witham and Coventry, was put up for sale a month ago following “very constructive and productive meetings” between Mr Gupta and Credit Suisse.
Mr Gupta said in April that none of GFG’s steel plants would close “on my watch”, even as he raced to agree a refinancing of debts owed to Greensill Capital.
The metals tycoon claims to have made progress with some aspects of his companies’ efforts to secure financial breathing space.
In the UK, its aerospace and special alloys steel business in Stocksbridge has been put on the block alongside its performance steels division in West Bromwich.
Chunks of GFG’s French operations, including its steel plant at Hayange, are also up for sale.
Mr Gupta underlined the perilous state of his group’s finances when he requested UK government support in the form of a £170m emergency loan.
Ministers rejected the plea on the basis that they could not be sure that the funds would not be used to prop up other parts of Mr Gupta’s international empire.
GFG declined to comment on the repayment of Close Brothers’ loan.
