Sanjeev Gupta must be joking: the future of his steel empire is far from rosy

Business and April Fool's jokes tend not to mix, as Volkswagen reminded everyone this week with a poorly executed gag about a name change. Its American operations would be called Voltswagen, it said, a nod to an electrical future. Get it?

Except someone forgot to remind the pranksters that the whole point of an April Fool's joke is that it is supposed to coincide with April Fool's Day, otherwise the joke is on you, and VW made the announcement a whole three days before.

Still, at least the carmaker was right about one thing: the idea that a company that will forever be remembered for “Dieselgate” could be taken seriously when it comes to electric vehicles is certainly funny. Maybe the Germans have a sense of humour after all.

So, it was good of Sanjeev Gupta to try to even things out by pretending he would explain on national radio what the future held for his giant metals empire now that its chief lender Greensill Capital has gone under.

Greensill’s demise has serious implications for his sprawling metals empire and 5,000 UK jobs, most of them in the steel industry, at plants in Rotherham, Hartlepool, Motherwell and many other provincial towns.

But anyone hoping for real answers from a man whose business has been an enthusiastic recipient of state support would have come away from his interview on the BBC's Today programme disappointed.

Even on the subject of how much Greensill had lent to his company GFG, Gupta said he wasn’t prepared to go into the details, other than to say it was in the “billions”.

Yet we already know from GFG’s own court testimony when Greensill crashed into administration in February that it had accumulated debts of $5bn with the firm, equivalent to the vast majority of the company’s total borrowings, it is thought. So why the reluctance to give even the most basic of financial figures?

And if Greensill no longer exists, how much longer can GFG survive? Greensill’s investors want their money back but Gupta reckons he doesn’t have to repay his loans for another three years. That sounds like wishful thinking but ultimately either a court or administrators at Grant Thornton will decide.

Besides, the business has received a "huge amount of interest from new financiers willing to back us", he said. Yet, with much of Gupta’s business interests pledged as collateral against the money it borrowed from Greensill, unearthing new lenders will be a challenge.

He also said that GFG was "not waiting for anybody" and those in charge were "doing what we can to help our businesses", so which is it? Either it needs alternative sources of financing, or it doesn’t.

The idea that the company’s emergency "Project Athena" plan, which requires every steel plant it owns to produce daily reports on how they are conserving cash, might guarantee survival seems fanciful at best.

On the contrary, it’s merely an indication of how stretched the business is that it has been reduced to balancing the books on a day-to-day basis.

A request for a £170m government loan has been turned down, a plea that Gupta tried to pass off as evidence that it was diligently exploring all avenues for new financing rather than proof that it was rapidly running out of options.

To anyone listening in Scunthorpe or Stocksbridge, or any of the other towns where Gupta is a major employer, it probably sounded like there was no crisis, that this was nothing more than another bump on what he described as “a tough journey”.

Gupta even promised that none of its plants will shut "under my watch". But who’s he trying to kid? With several winding-up petitions lodged against some of his UK companies, it may not be for him to decide.

Next up there's more optimism

Perhaps it’s Spring and the lighter evenings, though more likely it’s the gradual easing of lockdown, but there’s suddenly a sense of optimism in the air.

First it was Simon Emeny, boss of Fuller, Smith and Turner, fresh from reporting an 80pc drop in turnover after its pubs were closed for three quarters of the last year.

Rather than drowning his sorrows, Emeny chose instead to raise a glass to customers "eager to return to pubs" with a £54m fund-raising that will help to train extra staff needed to cope when the punters return.

Now, it’s Next chief Simon Wolfson who is feeling bullish. Despite a halving of profits last year, the retailer is raising earnings forecasts for the coming year after a bigger-than-expected boom in online sales.

Recent trading has convinced his Lordship of several things: first that the huge shift to online shopping has not only accelerated but is here to stay; and secondly that the outlook is rosier than many anticipated.

Wolfson thinks a combination of “pent-up demand” and “a healthy overall increase in personal savings” would make the “consumer economy” as he calls, “healthier than many presume”.

Next was an early-mover in online shopping, invested heavily in its website, logistics, and more recently, third party brands, so Wolfson has more reason than most to be confident about the recovery.

Nevertheless, for one of Britain’s most respected bosses to sound so upbeat is hugely reassuring.

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