Liberty Steel: Pledge to secure Newport plant jobs

Liberty Steel manufactures hot rolled coil

A pledge to help a Newport steel plant "to secure the jobs that it provides", has been made by the Welsh Government.

First Minister Mark Drakeford said the government would work alongside Liberty Steel (LS), after its boss wrote to Wales' economy minister "reinforcing the commitment" he has to the country.

Concerns were raised on Monday after the collapse of the firm's main financial backer, Greensill Capital.

LS boss Sanjeev Gupta, admitted it "creates a challenging situation".

Mr Gupta confirmed some of its UK operations were making a loss and this needed to be addressed.

LS employs about 5,000 people in the UK and it owns 11 other plants as well as the Newport works which employs 136 staff, with 50 workers at its site at Tredegar.

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During a Senedd meeting, Welsh Conservative leader Andrew RT Davies, asked Mr Drakeford whether there was "an offer on the table at the moment from the Welsh Government to support Liberty Steel's operations or associated companies here in Wales?"

Sanjeev Gupta, who owns Liberty Steel, had a meeting with union leaders to reassure them about the firm's financial future

In response, Mr Drakeford said the letter from Mr Gupta, dated 4 March, had not requested financial assistance.

"The purpose of the correspondence was to set up the difficulties that Greensill, the financial provider to GFG Alliance, has experienced," Mr Drakeford said.

"In his letter, Mr Gupta makes it plain that factories that the Alliance owns in these fields are operating at full capacity to meet high demand and generating positive cash flows."

'Positive' union meeting

Steel unions Community, Unite and GMB met Mr Gupta earlier to seek assurances and to "request full transparency on the challenges facing Liberty Steel".

A statement issued from the National Trade Union Steel Coordinating Committee said it had been "positive and constructive" meeting.

"It is clear Mr Gupta intends to secure a refinancing of the debt to provide the business with the necessary liquidity going forward," it said.

"Our priority is to secure the future of all Liberty Steel's UK assets, and to this end all options should be considered."

LS has confirmed it has seen demand fall by 60% following the downturn in the aerospace sector because of the Covid-19 pandemic.

"We are discussing new opportunities with customers and suppliers to improve cash flow and looking to secure additional working capital facilities to support the business," it said in a statement.

"We also continue to use the furlough scheme to support employees affected by the weakness in the aerospace market."