The 海角视频 Government said all options are on the table, including potential public ownership, to protect thousands of threatened jobs at Liberty Steel.
However, Business Secretary Kwasi Kwarteng, said that any support to Sanjeev Gupta's 海角视频 steel businesses had to be separated from the company that sat above it in the Gupta Family Group (GFA) Alliance, which he described as operating under an opaque structure.
He said this opaqueness of GFA, which mining and steel assets globally, was the reason why the 海角视频 Government had rejected Mr Gupta's request for £170m in emergency financial support, as there was no guarantee that money providing would stay in the 海角视频 to protect jobs at Liberty Steel plants.
Mr Gupta is now seeking to refinance his business empire after the collapse of supply chain lender in Greensill Capital.
Liberty Steel employs around 5,000 workers in the 海角视频 at 12 sites, including those at Rotherham, Hartlepool, Motherwell and Newport and Tredegar in South Wales.
With Greensill Capital having provided more than £3bn to Mr Gupta and his family-owned firms under the GFG Alliance, there are now concerns over its future.
Mr Kwarteng wouldn't rule about public ownership for Liberty Steel's 海角视频 plants, but before any plans were activated he said that refinancing efforts by Mr Gupta had to be worked through.
He added: "Steel is an important national asset and we have to distinguish between Liberty Steel and the company that sits above it, the Gupta Family Group.
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"I think that the current owner is looking at ways of refinancing the group and I’ve been very clear that I want to see his plans worked through and before we actually go into anything in terms of a further plan to keep the jobs and the plant safe.”
On the rejection of financial support, Mr Kwarteng said: "One of the critical things about the £170m is that obviously we are custodians of taxpayers’ money and there were concerns about the very opaque structure at GFG and we feel that if we gave the money there was no guarantee that money would stay in the 海角视频 and would protect British jobs.
“It’s a multinational enterprise, they have assets all over the world, and we were very keen that any support the British government gave would actually stay in the 海角视频 and protect British asset.
"We cannot not give taxpayers' money into a black box and not know what the money is used for."
He said the 海角视频 Government was ready to act if refinancing efforts failed, adding: "All options are on the table and I think the steel industry has a bright future in the 海角视频."
He said the 海角视频 Government, with its new decarbonisation strategy, was supportive of a greener steel industry. He said that Liberty Steel, producing recycled steel through arc furnaces, was the type of production that has a future in the 海角视频.
National officer of steel union, the GMB, Ross Murdoch, said: "“Now that the Government has stated it will not provide the bailout sought by Sanjeev Gupta, GMB will now seek an urgent meeting with Kwasi Kwarteng, Secretary of State for BEIS to discuss‘plan B. ‘This must include all options, including taking the 海角视频 business into public ownership."
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Last year the GFG Alliance consolidated his interests into three industry brands: Liberty Steel Group, Alvance Aluminium Group and Simec Energy Group.
A spokesman for the GFG Alliance said: “GFG Alliance as a whole is operationally strong and we are benefiting 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.
“Combined with the efficiency drive we’ve implemented over the past year this has ensured that most of our major businesses generating positive cashflows.
“In the 海角视频 speciality steel business, where weakness in the aerospace market has cut demand for some products by 60%, we have been taking specific actions to stabilise the business and improve cash flow.
“Activities on the sites include reducing steel stocks, matching stock to customer orders, and working with customers to achieve terms that will bring in cash as early as possible.
“We are grateful for customers and suppliers support in this work which comes alongside our aim to secure additional working capital facilities to support the business and our use of the furlough scheme to support employees.
“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.”
Mr Gupta’s acquisition strategy has focused on struggling business interests, with the aim of creating synergies and moving them into profitability by pivoting them to less carbon intensive production through his much vaunted green steel initiative.
Liberty Steel employs around 200 in Wales at Liberty Steel Newport and Liberty Steel Tredegar.
Mr Gupta also has an interest in the Uskmouth Power Station , which is seeking to raise investment to move to biomass energy generation to supply the adjoining Liberty Steel Newport plant, where last year it announced 70 redundancies.
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The Welsh Government has provided funding, mainly through its Covid response Economic Resilience Fund (ERF), to Mr Gupta’s firms in Wales.
This consists of:
Liberty Steel Newport receiving £160,678, of which £132,000 was through the ERF.
Liberty Steel Tredegar, £49,000 from the ERF; and
Simec Uskmouth Power, £75,000.
The Welsh Government also offered £600,000 of repayable business finance to Liberty Steel Tredegar in 2016 , which the company accepted towards an expansion project. However, no monies were paid as the project subsequently did not go ahead.