The main financial backer of Sanjeev Gupta’s steel empire collapsed into administration with fears growing over 5,000 jobs in the industry.

Greensill Capital said on Monday it was ‘in severe financial distress’ and appointed administrators.

Greensill were the main lender to Gupta’s GFG Alliance, which owns Liberty Steel and other firms.

Liberty owns 12 steel plants in the UK including in Rotherham, Motherwell, Stocksbridge, Newport and Hartlepool.

A spokesperson for Grant Thornton said its insolvency practitioners Chris Laverty, Trevor O’Sullivan and Will Stagg had been appointed as joint administrators of Greensill Capital and Greensill Capital Management Company.

“The joint administrators are in continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets. As these discussions remain ongoing, it would be inappropriate to comment further at this time,” the spokesperson added.

The business secretary, Kwasi Kwarteng, is said to have held emergency meetings over the weekend with Jon Ferriman, the boss of Liberty Steel UK. 

They reportedly discussed contingency plans if Greensill went bust.

Liberty employs about 3,000 people with around 5,000 people working for GFG Alliance in the UK.

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