Blackrock, the largest asset manager in the world, supports a controversial offer from the Sanjeev Gupta metal magnate to keep control of his vacillating British steel empire.
Sky News learned that the leaders of Blackrock authorized the issue of a letter of support for financing which could allow Mr. Gupta to continue to exercise a handful on the Speels UK (SSUK) of Liberty Steel – which employs nearly 1,500 people in southern Yorkshire.
People close to the situation said on Monday that the private capital funds managed by Blackrock had expressed their desire to provide tens of millions of pounds to Liberty Steel Uk.
One source suggested that the figure could reach 75 million pounds sterling.
Sky News revealed this weekend that Mr. Gupta aligned a so-called SSUK pre-pack administration, which would make him get rid of hundreds of millions of pounds of taxes and other responsibilities.
Blackrock, who refused to comment, has already provided funds in Liberty Steel in the United States and Australia.
Mr. GUPTA is underway to finalize an agreement before an hearing of the liquidation petition scheduled for Wednesday, which could lead to the compulsory liquidation of the SSUK.
A source close to the magnate expressed the conviction that the hearing would be adjourned, as it had been in May and July.
Begbies Traynor, the accounting firm, is working on efforts to advance the pre-pack agreement.
Whitehall sources said this weekend that government officials had intensified SSUK’s collapse of the liquidation petition was approved.
If this were to happen, SSUK would fall into compulsory liquidation in a few days, with a special manager appointed by the official receiver to perform operations.
Mr. Gupta’s British company operates steel plants in Sheffield and Rotherham in southern Yorkshire, with a combined workforce of more than 1,400 people.
A connected pre-pack risks strong opposition from Liberty Steel creditors, who include HM income and customs.
UBS, the investment bank which saved Credit Suisse, a major of the collapsed financial company Greensill Capital – which itself had a several billion dollars exhibition at the parent of Liberty Steel, GFG Alliance – is also a creditor of the company.
Grant Thornton, the accounting firm who takes care of the administration of Greensill, also monitors the legal proceedings with interest.
A spokesperson for Liberty Steel said this weekend: “Discussions are underway to finalize the options for SSUK.
“We remain determined to identify a solution that preserves the electric arc bankruptcy in the United Kingdom – a critical national capacity by supporting strategic supply chains.
“We continue to work towards a result which best serves the interests of creditors, employees and the wider community.”
Last month, the Guardian said that Jonathan Reynolds, the business secretary, was monitoring the events of the Liberty Steel SSUK arm and had not excluded to intervene to provide support to the company.
Such a decision is still considered an option, although it is not said to be imminent.
The Department of Affairs and Trade said: “We continue to closely monitor the developments around Liberty Steel, including all public hearings, which are a question for the company.
Other parts of Mr. Gupta’s Empire have been showing signs of financial stress for years.
Mr. Gupta would have explored if he could persuade the government to intervene and support SSUK using the promulgated legislation to take control of British Steel operations.
Whitehall’s initiates told Sky News in May that Mr. Gupta’s openings had been pushed back.
He had previously asked for the government’s help during the pandemic, but this plea was also rejected by the ministers.
SSUK, which also operates from a Bolton site in Lancashire, manufactures highly designed steel products to use in sectors such as aerospace, automotive and oil and gas.
The company said earlier this year that it had invested nearly 200 million pounds Sterling in the past five years in the British steel industry, but had been confronted with “significant challenges due to the outbreak of energy costs and excessive dependence on cheap imports, which has a negative impact on the performance of all British steel companies”.
Liberty Steel refused to comment on the support of BlackRock.