THE Government has rejected an appeal by Liberty Steel for £170 million in financial support, according to sources.
The company told the Government last week that support was needed to pay operating expenses and deal with recent losses.
Concerns over the future of the company have been expressed after financial backer, Greensill Capital, went bust. Liberty Steel employs around 5000 workers at a number of sites across the UK, including the Dalzell plate mill in Motherwell.
A Government spokesman said: “The Government is closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader UK steel industry and trade unions.
“The Government has supported the steel sector extensively, including providing over £500 million in recent years to help with the costs of energy.
“Our unprecedented package of Covid support is still available to the sector to protect jobs and ensure that producers have the right support during this challenging time.”
It is understood that ministers have concerns about the structure of the company and whether any bailout would have remained in the UK.
A spokesman for Liberty’s GFG Alliance said: “GFG Alliance as a whole is operationally strong and we are benefitting from strong markets in steel, aluminium and iron ore.
“While Greensill’s difficulties have created a challenging situation, we have adequate funding for our current needs.
“Discussions to secure alternative long-term funding continue to make good progress and while this takes place we have asked all of our businesses to manage cash carefully.
“We will continue to work closely with the unions and our employees to identify the most effective ways of supporting the business and preserving jobs.”
Shadow business secretary Ed Miliband said: “The Government must have a Plan B for Liberty Steel to protect thousands of jobs and our steelmaking capacity, which is vital for our communities and our national security.
“All options should be on the table, including public ownership.”
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