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by Jack Thomson
24 March 2021
Impact of Greensill Capital's administration to be 'monitored' by Scottish Government

Fergus Ewing (Parliament TV)

Impact of Greensill Capital's administration to be 'monitored' by Scottish Government

The struggles of a financial services company and the potential impact in Scotland are being monitored by the Scottish Government.

Rural economy secretary Fergus Ewing updated MSPs on the "commercial repercussions" after Greensill Capital entered administration on 8 March.

The specialist bank was a lender to Sanjeev Gupta's business empire. His family group of companies, known as the GFG Alliance, has been affected by Greensill's collapse.

In Scotland, GFG owns businesses through Liberty Steel Group, Alvance Aluminium Group and the Simec Group.

These groups operate the Dalzell and Clydebridge steelworks, the Lochaber aluminium smelter, the hydroelectric power station at Fort William, Jahama Highland Estates and Shand Cycles.

Greensill's failure has raised concerns that thousands of jobs at Libery Steel's assets in the UK may be at risk.

The government has provided more than £500m in guarantees to the smelting plant. It has also been reported Gupta persuaded it to give a 25-year guarantee tied to the hydro-electric power station and smelter.

Ewing said he had spoken with Gupta on Thursday, adding he was "open about challenges posed by the collapse of Greensill", but emphasised the "operational health" of GFG's Scottish operations.

He added: "He indicated that market demand is strong and metal prices are currently among the best seen in over a decade.

"Hence GFG's Scottish steel and aluminium businesses are presently on a profitable footing according to Mr Gupta.

"Mr Gupta told me the group has adequate funding for its current needs, while they progress refinancing.

"He nevertheless confirmed that stabilising the finances in the near term is important to its future activities, including those in Scotland."

He added: "I can assure parliament that officials are engaging regularly with the business at local and national level and through a ministerial taskforce and we are monitoring the situation closely."

Ewing said a "more substantive picture" is likely to emerge over the coming weeks as Greensill's administrators assess the state of affairs and prepare proposals.

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