UK

Sanjeev Gupta’s GFG Alliance still owes Greensill Capital nearly £500m

Maria Ward-Brennan
Wed, 17 April 2024 

Photo credit JUSTIN TALLIS/AFP via Getty Images

The administrators for Greensill Capital are still owed around $587.2m (£472m) from Sanjeev Gupta’s GFG Alliance, it has been revealed.

Grant Thornton, the administrators for Greensill, published a report on Sunday, where it outlined how the firm is still in ongoing discussions with a number of debtors, including GFG Alliance, regarding outstanding balances owed.

Grant Thornton warned that as the firm is not able to recover the funds owned, it will “continue to consider the recovery options that are available to Greensill Capital UK under the security and guarantees granted by GFG in connections with the GFG programmes.”

“However, we are not able to provide the details of such strategies so as to not prejudice our position,” it added.

GFG Alliance was Greensill’s biggest client and it was reported at the time of the collapse that it had an exposure totalling $5bn.

A GFG Alliance spokesperson said: “Liberty Steel Group has signed a new framework agreement with its major Greensill creditors.

“The new framework comes after achieving major milestones in raising new capital including a successful US$350m bond issue through Jefferies LLC and a $350m Asset-Backed Term Loan through Blackrock and Silver Point Finance.

“Execution of the framework agreement will build on improvements made across the group since the collapse of Greensill Capital.”

Commenting on the report, Tim Symes, insolvency and asset recovery partner at leading law firm Stewarts, said: “Like any security, a guarantee to pay another company’s debts is only as good as the ability of the giver to actually pay it.”

“The GFG group of companies is complex and opaque, and so it remains to be seen whether the companies that have granted the guarantees are in fact the ones with sufficient value to be able to meet any payment demands from the administrators,” he added.

News of the amounts owed to Greensill by GFG Alliance comes after the Insolvency Service launched a director disqualification claim against Greensill’s director Lex Greensill. This move came after it was revealed that Greensill filed a lawsuit against the Department for Business and Trade over the alleged “misuse of private information”.

Greensill administrators threaten to seize Sanjeev Gupta’s assets after he fails to repay £472m


Matt Oliver
Tue, 16 April 2024 

Sanjeev Gupta's GFG reportedly owed Greensill £3.7bn at the time of its failure in 2021 - Stefan Wermuth/Reuters

Administrators for collapsed finance firm Greensill Capital have warned they could attempt to seize assets from steel magnate Sanjeev Gupta to recover $587m (£472m) in unpaid funds.

GFG Alliance, a collection of companies headed by Mr Gupta, has been targeted by the administrators having been one of Greensill’s most prolific borrowers before its collapse.

As a specialist lender that advanced cash to companies so they could pay suppliers early, Greensill was reportedly owed £3.7bn from GFG at the time of its failure in 2021.

This includes $587m owed to the UK arm of Greensill Capital, which is yet to be repaid despite long-running negotiations, according to an update published by administrators at Grant Thornton.

Talks over repayment were ongoing but if these fail then Greensill’s administrators said they would “consider recovery options that are available” under security and guarantees given by GFG for various loans.

It is common for borrowers to put up certain assets as security for loans in the event they cannot make repayments, or offer up guarantees that a third party will pay on their behalf as a last resort.

However, the administrators declined to give further details “so as not to prejudice our position”.

They added that non-binding agreements had been signed with Mr Gupta and various GFG entities since 2022 but that no debt repayments had been made as of March 7.

Another agreement regarding debt repayments was struck on March 15 this year.

A GFG spokesman said the agreement comes after the company raised new funds, although it is understood that the amount owed by Mr Gupta’s companies remains in dispute.

GFG missed a previous repayment date agreed by both sides but this was because negotiations remained ongoing, a person familiar with the discussions said.

A company spokesman refused to confirm the new deadline for GFG’s debt repayments.

Prior to its failure, Greensill was valued at $3.5bn and counted Lord Cameron, the Foreign Secretary, as an adviser.

The company filed for insolvency in 2021 after buckling under billions of dollars in debt, with its collapse accelerated by a decision from Credit Suisse to suspend £7bn of funds.

At the time of its withdrawal, Credit Suisse cited concerns over the bank’s exposure to Mr Gupta’s businesses, which had borrowed billions of pounds to fuel a rapid expansion.

Greensill subsequently lost insurance coverage for its financing and filed for insolvency.

However, the company’s close relationship with Mr Gupta’s empire has come under scrutiny amid reports it lent money to GFG companies based on speculative invoices from customers they had never done business with.

LA REVUE GAUCHE - Left Comment: Search results for GREENSILL 

LA REVUE GAUCHE - Left Comment: Search results for SANJEEV GUPTA

UK

Ministers map out Liberty rescue plan: Emergency move to save 5,000 jobs after steel giant calls for £170m taxpayer bailout

Sanjeev Gupta wrote to Government officials in a desperate bid to secure a £170million bailout from taxpayers

Troubles at the UK's third largest steel producer follow the collapse of its main financier Greensill Capital

Concerns are now rising that Gupta's British operations could slide into administration unless new financing can be arranged

By EMMA DUNKLEY, FINANCIAL MAIL ON SUNDAY
PUBLISHED: 28 March 2021


The Government is preparing to trigger an emergency plan to save 5,000 British jobs in the event of a collapse of Sanjeev Gupta's steel business.

Gupta, founder of Liberty Steel and its vast parent company GFG Alliance, wrote to Government officials on Thursday in a desperate bid to secure a £170million bailout from taxpayers.

Troubles at the UK's third largest steel producer follow the collapse of its main financier Greensill Capital, which counted former Prime Minister David Cameron as a paid adviser.

Plea: Sanjeev Gupta wrote to Government officials in a desperate bid to secure a £170million bailout from taxpayers

Concerns are now rising that Gupta's British operations could slide into administration unless new financing can be arranged.

Gupta's call to Ministers for help comes just months after he forked out £42million – nearly a third of the bailout request – on a house in Belgravia.

Liberty owns a dozen steel plants in Britain, including sites at Newport and Rotherham. Private equity firms are understood to be assessing parts of GFG's global empire.

In its letter to the Department for Business GFG asked for the money to cover working capital and operating losses.

But Whitehall is thought to be concerned that bailout money might be used in other parts of Gupta's global empire instead of supporting UK jobs. There are also fears the firm could then require further financial support.

Boris Johnson has taken a personal interest in the situation, industry sources said. The Government is already thrashing out emergency plans in case the situation rapidly worsens, The Mail on Sunday understands.

It is thought the preferred route would be to wait for Liberty Steel to enter compulsory liquidation, at which point the Government would step in and keep the company running until a new buyer could be found.

This would be similar to the rescue of British Steel which collapsed in May 2019. Around 3,000 jobs were saved by an intervention which cost taxpayers nearly £600 million. The Official Receiver, a state agency, took control of the firm with the backing of the Government until it was sold to Chinese metals company Jingye last March.

Another option could see the Government support administrators to find a new buyer if Liberty Steel, which is thought to comprise seven different companies, collapses.

Dame Margaret Hodge, former chairwoman of the Public Accounts Committee, said: 'You need to save the jobs, not the man.'

She said there was a lack of transparency over 'where his money has come from, where it goes', adding: 'But what you don't want to do is sacrifice the jobs.'

The union Unite said it 'is urging the Government to do everything necessary' to save Liberty, adding: 'The loss of Liberty Steel and the specialist products it manufactures for the aerospace, automotive and oil and gas sectors would have damaging consequences beyond the steel sector.'

One industry source said it would be difficult for the Government to step in without GFG Alliance first becoming insolvent, because the company is 'a sprawling beast' with huge debts. Another source said: 'It's messy, it's very, very messy.'

And with private equity firms understood to be eyeing parts of GFG, one source in the sector said: 'It's an asset-backed bet, potentially Lone Star and Cerberus [are interested].'

Cerberus declined to comment. Lone Star did not respond.

Advisers to GFG Alliance are working on a private restructuring plan called 'Project Battery'.

Liberty Steel employs 3,000 people in Britain. Another 2,000 UK jobs span other divisions of GFG Alliance including aluminium firm Alvance and renewable energy business Simec.

Liberty Steel was forced to halt production at some sites earlier this month to preserve cash. It owes Greensill an estimated £3.6 billion, according to the Financial Times.

A GFG Alliance spokesman declined to comment on the letter, but said: 'GFG Alliance as a whole is operationally strong and 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 longterm funding continue to make good progress.

'In the UK speciality steel business, where weakness in the aerospace market has cut demand for some products by 60 per cent, we have been taking specific actions to stabilise the business and improve cash flow.'

These include 'reducing steel stocks ... and working with customers to achieve terms that will bring in cash as early as possible'.

RELATED ARTICLES

Ministers looking at all options to save Liberty Steel - and.

..

Sanjeev Gupta urges colleagues in GFG Alliance empire to cut..

.Unions tell ministers to save Liberty Steel jobs if firm..

.Sanjeev Gupta sounds alarm over his UK steel...

UK

Sanjeev Gupta gearing up for war over steel empire: Liberty Steel tycoon enlists a 'barrage of lawyers' to defend business after lender's collapse

Gupta's GFG Alliance is holding emergency talks to secure new financing

Credit Suisse has petitioned a winding-up order on GFG's commodities trader

Gupta said lenders risked hurting their own interests by calling in loans

By ALEX LAWSON AND EMMA DUNKLEY, FINANCIAL MAIL ON SUNDAY

PUBLISHED: 4 April 2021

Industrial tycoon Sanjeev Gupta has drafted in a 'barrage' of lawyers to defend his steel empire as a crisis at its biggest lender threatens to engulf him.

Gupta's GFG Alliance, which owns Liberty Steel in the UK, is holding emergency talks to secure new financing and save 5,000 British jobs after the collapse of Greensill Capital.

Credit Suisse, the Swiss bank that provided $10billion in funding to Greensill, has petitioned a winding-up order on GFG's commodities trading business.

But Gupta – who last week admitted he owes billions – has delivered a pugilistic response, saying from his home in Dubai: 'We have our legal defences ready. There is a barrage of lawyers who are readying up all their guns to fight this off.'

Tough talk: Sanjeev Gupta said lenders risked hurting their own interests by calling in loans before the financing was complete

Gupta said lenders risked hurting their own interests by calling in loans before the financing was complete. He added: 'Damaging the business is not in the interest of anybody, especially not the lenders.

'What they are doing is not logical and the arguments were made to them very robustly that they are damaging their own stakeholders, their own recovery prospects.'

Supply chain finance firm Greensill, which counted former Prime Minister David Cameron as an adviser, fell into administration last month. Gupta has been scrambling to refinance the billions Liberty Steel owed Greensill.

Concerns have been raised that Gupta's sprawling empire is opaque and would be difficult to rescue in its current form.

But the Indian-born British businessman, educated at Trinity College Cambridge, said in an interview with The Weekend Australian newspaper: 'There is a lot of interest in refinancing, given the strength of our businesses and the strength of the market. But given the noise on top of that and the surrounding situation, things need to settle down and we need a little time to get that refinancing organised.'

He added: 'My UK steel initiative has always been a labour of love. The UK industry has been decimated over the last few decades. Every single plant I bought was closed or closing.'

Gupta's comments came as GFG prepares to reopen its UK steel plants this week after pausing production at some sites last month. He has publicly vowed plants will not close under his watch. 'It is my commitment to my people. I repeated that very clearly, that I would not let them down, they don't have to worry about their futures,' he said.

Gupta has pointed to a 14-year high in steel prices. But there are other pressures on the industry.


Exclusive research for The Mail on Sunday by UK Steel reveals that exports from Britain to the EU have plunged 34 per cent in the last three months, following Brexit and the introduction of new quotas.

Steel exports were just under 420,000 tons in the first quarter compared with an historic average of 630,000 tons.

Sources told this newspaper last week that the Government is ready to protect the business should it fall into insolvency, effectively ousting Gupta while a new owner is found.

Separately, it has emerged that Greensill Capital tried to tap up private equity giants for new funding last year. The firm, founded by Australian Lex Greensill in 2011, is understood to have held talks with firms including Apollo and Blackstone.

One source said Greensill was seeking new funds around the time the pandemic took hold, but the market had 'tightened up'.

But the source also said he did not feel Greensill Capital had sufficiently answered his questions over its operations and financing – and the source said his company took these responses as 'a warning signal to stay away'.

Greensill, facilitated speedy payment for suppliers – in exchange for a small fee. It came under pressure after its insurer, part of Tokio Marine, made the decision in July last year not to extend its cover. Then last month Credit Suisse froze $10billion of funds connected to Greensill.

Greensill was also on the hunt for investors last autumn to help bridge a path to a $7billion (£5billion) stock market flotation slated for the second half of this year.

Another private equity source said Greensill Capital was 'opaque' and that conversations about the capital raising were only 'very early stage'.

Greensill had also held talks this year with a subsidiary of Apollo about acquiring Greensill assets, which ultimately fell through.

Apollo, Blackstone and Greensill declined to comment.

Sanjeev Gupta’s vast steel empire risks finally falling apart

Businessman’s balancing act in Luxembourg and elsewhere long offered promise of preserving jobs

Sanjeev Gupta © Photo credit: AFP

06/12/2024

For the past three years, steel tycoon Sanjeev Gupta has performed an extraordinary feat of corporate survival.

The British industrialist managed to keep most of his empire of steel plants even as creditors circled, concerns arose about alleged wrongdoing regarding trades and he faced probes for suspected fraud and money laundering.

Now his luck may be running out.

Gupta’s Speciality Steel UK Ltd. unit went to court in London on Wednesday to try to avoid liquidation. The operator of plants in northern England proposed a restructuring plan that would see many creditors get almost none of the money they’re owed.

Gupta warned in court documents that without an agreement the company would cease operating and enter insolvent liquidation. He said that would mean all 1,500 employees would be automatically dismissed.

That’s just one part of GFG Alliance — his sprawling group of businesses that employs roughly 30,000 people in 30 countries — that’s crumbling. Around the world, a number of his companies are shuttering production, failing to pay suppliers and staff and falling into insolvency.

Last week, GFG’s Liberty Steel operation in Luxembourg admitted in court that it was bankrupt, marking the end of two years in which employees didn’t work in the shuttered Dudelange factory but were paid salaries until that too stopped a month ago. A receiver was appointed to take over the factory and its unpaid bills after the subsidiary of UK-based GFG Alliance never completed negotiations to sell the site despite years of mediation efforts by Luxembourg’s economy ministry.

Bankruptcy means curtains for steel factory in Luxembourg

Like his steel industry peers, Gupta has suffered from a wave of cheap imports from top producer China, where an ailing construction sector has left the country with too much supply and hurt prices. He’s also being criticized for continuing to spend lavishly, including splashing out on a luxury apartment, just as his workers and suppliers feel the pinch.

“The market conditions are placing our businesses under even more pressure, notably in Europe,” GFG Alliance executive Paul Francis said in a recent email informing staff that the company would be late paying their salaries. “The consequences of this are inevitably being felt in our central financial cash flow mapping.”

GFG’s investments in the UK and Australia show its commitment to navigate tough market conditions, Chief Transformation Officer Jeffrey Kabel said in a statement.

The company “is engaged in multiple restructurings and legal processes that will reorganise its debt and settle disputes,” he said. “These processes are nearing completion and will set a platform for recovery and growth as we begin to restart operations at our core businesses.”

Also read:

Taxpayers could lose millions with Liberty Steel collapse

Gupta, nicknamed the “savior of steel” for his history of buying unwanted assets at cheap prices, also has other problems.

His conglomerate is being investigated in France and Britain over allegations including fraud and money laundering. Prosecutors rounded on GFG after the collapse of its main lender Greensill Capital in 2021. In the wake of Greensill’s downfall, it was revealed that GFG had been borrowing money against expected future invoices, for sales that were merely predicted.

GFG has denied wrongdoing.
Troubled Operations

Numerous Gupta-owned businesses have faced difficulties from the challenging steel environment in the past year, with the Speciality Steel unit already idling some production.

Also read:

UK judge assigns administrator to help ArcelorMittal collect €140m debt

As part of the proposed restructuring plan, some creditors say they’ll receive only 0.1% of what they’re owed, according to documents submitted to London’s High Court.

It’s unclear how indebted Speciality Steel is, as some debts are disputed and it hasn’t filed full accounts since 2019, when it had total liabilities of £245 million ($312 million). UK business registry Companies House said it’s taking enforcement action.

Failure to file accounts stems from Greensill’s collapse, a GFG spokesperson said. Directors have been clear on the challenges of finding an auditor and have taken reasonable steps to resolve the situation, the spokesperson said.


Still, Gupta has a long history of pulling off surprise escapes. GFG said in court that by reducing its debts and dealing with the enforcement action against its UK steel businesses it can raise fresh financing, though some creditors are less confident this will be possible.

While union officials for Speciality Steel workers hope for government help once the insolvency proceedings and fraud probes are resolved, authorities have so far refused to commit to supporting the plants. The UK in 2021 rebuffed a £170 million bailout request from GFG. The Department for Business and Trade said it’s monitoring developments around Gupta’s businesses.

“This government has​ laid out our plans to rebuild the UK steel industry more broadly​ in order to support communities now and for generations to come,” it said.
Plant Workers

Many governments had welcomed Gupta’s arrival, and even gave financial support when he acquired assets. But with some businesses on the brink of going under, politicians are increasingly fretting about future jobs at plants, which are often in regions where there are few other economic opportunities.


Such is the case in Hungary, where Gupta struck a deal in 2023 for a bankrupt steel firm. Relations between Gupta’s Liberty Steel and Hungary became strained after the company stopped paying its workers a few months ago. The government said Liberty broke its promise to invest in the steel plant, and announced a decree that made it easier to liquidate the companies owned by Liberty. Liquidation proceedings for the local businesses began in October.

The GFG spokesperson said that further investment in Hungary was inhibited by the failure of provision of promised working capital, and that credit appetite of banks was hurt by the challenging steel market.

Elsewhere in Europe, creditors last month asked a court to send Gupta’s Czech unit into bankruptcy after the insolvency administrator recognized an equivalent of more than $300 million of claims and attempts to reorganize the business failed.

Founded seven decades ago and taken over by Gupta in 2019, the Czech mill has gradually shuttered most operations over the past year and cut thousands of jobs after it failed to pay its debts and needed help to pay salaries. While the smelters remain shut, parts of the compound have resumed some steel-rolling operations.

Other Problems

Gupta also faces headaches in Australia, which has long been the most profitable part of his business.

The Whyalla steelworks there has faced months of shutdowns this year, and local media have reported issues with payments to contractors. GFG also owes royalties to the state, according to parliamentary documents. GFG said additional funding is in the process of being provided.

Despite the list of troubles, Gupta continues to live an expensive lifestyle. Australian media reported that he bought a prime waterfront apartment in Sydney for millions of dollars this year. He also threw a party for friends and business contacts in Turkey this summer to celebrate his wife’s birthday, according to people familiar with the matter who asked not to be identified.

GFG declined to comment on the property purchase and party in Turkey.

South Australian politician Eddie Hughes, whose seat covers the Whyalla region, has been among Gupta’s fiercest critics.

“Sometimes it just takes one more straw on the camel’s back to unleash the pent-up frustration and anger,” he wrote on Facebook in September. “The latest high-end Gupta property acquisition in Sydney might well prove to be that straw.”

©2024 Bloomberg L.P.

CRIMINAL CAPITALI$M

Calls for Scottish minister to provide assurance over potential steel company meltdown

The future of Scotland’s surviving steel and aluminium plants have been thrown into doubt after the collapse of a finance firm, which also potentially exposes the Scottish Government to its massive losses after it guaranteed to underwrite a hydro-electric power station and aluminium smelter near Fort William in a deal to save the plants.

Sanjeev Gupta at the Lochaber plant.

Demands have now been made for economy secretary Fiona Hyslop to appear in Parliament to explain the the impact of Greensill Capital entering administration on the Liberty Steel businesses in Scotland.

It is understood that billionaire steel tycoon Sanjeev Gupta, who owns Liberty Steel, owes Greensill more than £3 billion.

However, he has moved to quell concerns, telling workers’ unions that his parent firm GFG Alliance was in the process of securing alternative funding and would survive the collapse of its major backer.

Mr Gupta, who was hailed as the “saviour of steel”, said some of Liberty Steel's UK operations were loss-making and this needed to be addressed.

Speaking after crisis talks with unions following specialist bank Greensill Capital going into administration, Mr Gupta said his group was taking "prudent steps" to manage cash and was seeking new funding.

The failure of Greensill has left many fearing that thousands of jobs at Liberty Steel’s assets in the UK could be at risk. These include those who work at the Lochaber aluminium smelting plant, to which the Scottish Government has provided more than £500 million of guarantees, and the steel plant in Motherwell.

It is believed Mr Gupta persuaded the Scottish Government to give a 25-year guarantee tied to the hydro-electric power station and aluminium smelter.

Using the guarantee, which committed the Scottish Government to buying the plant's electricity if the smelter shut down, finance firm Greensill issued about £575m of top-rated bonds in 2017 to Swiss fund manager GAM.

In return, Mr Gupta pledged to save 170 jobs at the smelter and create 2,000 more at a separate aluminium-wheel factory, which would make two million aluminium wheels a year by 2020.

The factory has not been built and it is understood Mr Gupta is considering opening a water bottle factory instead.

However, after administrators were appointed on Monday, Greensill said in a court filing that Mr Gupta's operations were in "financial difficulty" and defaulting on debt.

Scottish Liberal Democrat leader Willie Rennie said it was now vital that Ms Hyslop make a statement to Parliament on the future of Liberty Steel’s Scottish sites.

"The Scottish Government once again find themselves mired in murky business,” he said.

"When the Government provided guarantees in December 2016, they made big promises about a shining future for the Lochaber smelter. Now it seems that the smelter's parent firm are in trouble and Scottish taxpayers could be on the hook.

"Just as with the BiFab yards in Fife, the Scottish Government are good at handing out money to financiers and hopeless at providing high wage, highly-skilled jobs for Scottish workers.

"The economy secretary needs to come to Parliament and explain what's next for workers and taxpayers."

Scottish Conservative Highlands and Islands MSP Jamie Halcro Johnston said the news of the collapse of Greensill had come as a “complete shock” as just "a matter of weeks ago came the positive news of an expansion at Lochaber”.

"It is a vital local industry which employs almost 200 workers and it's incumbent on the SNP to explore all options to ensure the survival of this site and those in Motherwell and elsewhere in the UK,” he said. “We need to do everything possible to preserve jobs."

His colleague, Scottish Conservative finance spokesperson Murdo Fraser, said the government’s finance minister Kate Forbes needed to “provide urgent clarity, specifically in relation to how much taxpayers' money may be at risk and what is being done to address that”.

"As seen with BiFab, the ferries fiasco and other scandals, this SNP Government has a reverse Midas touch when it comes to business,” he said.

"They must explain what is going on, the terms of these agreements and do everything possible to insulate public funds from unnecessary loss."

Greensill Capital, which has funded Mt Gupta's businesses expansion, was tipped into administration last week when one of its main backers, Credit Suisse, suspended £7.2bn of investment funds.

Greensill had used that investment to fund its supply chain finance deals, which provided huge sums to Mr Gupta's business.

In a statement after a meeting with union representatives, a spokesperson for GFG said: “Sanjeev had a productive meeting with the unions to discuss the plan to make the parts of the UK businesses facing weak market conditions more financially sustainable and address the disruption caused by the situation at Greensill.

“Liberty Steel Group has provided significant support to the UK speciality steel business, which has seen the demand for some products fall by 60 per cent following the downturn in the aerospace sector due to Covid-19.

“As part of the prudent steps we are taking to manage cash, we are discussing new opportunities with customers and suppliers to improve cash flow and looking to secure additional working capital facilities to support the business.”


In a joint statement, unions Community, GMB and Unite said: “The meeting was positive and constructive and it is clear Mr Gupta intends to secure a refinancing of the debt to provide the business with the necessary liquidity going forward.”

A Scottish Government spokesperson said: “Funding sources available to the GFG Alliance are commercial matters for the business.

“The Scottish Government has a comprehensive security package relating to the guarantee Scottish ministers provided to the Lochaber aluminium smelter in 2016.

“We maintain regular dialogue with the GFG Alliance covering a range of its industrial interests in Scotland across steel, aluminium and renewable energy production.”

CRIMINAL CAPITALI$M A FAMILY BUSINESS
Meltdown? Turmoil at UK steel empire stokes job fears
Issued on: 30/05/2021 -

Sanjeev Gupta's Liberty Steel company employs 3,000 UK workers and parent company Gupta Family Group (GFG) Alliance has 35,000 employees around the world BEN STANSALL AFP/File

London (AFP)

Sanjeev Gupta's Liberty Steel company -- one of the world's largest steel empires -- faces an uncertain future after announcing plans to sell three of its UK plants.

Liberty employs 3,000 UK workers and parent company Gupta Family Group (GFG) Alliance has 35,000 employees around the world, with metalworks and mines in Europe, the United States and Australia.

Gupta was once seen as the saviour of British steelmaking but is now fighting for survival following the collapse of its main lender Greensill Capital and fraud allegations.

The Indian-British billionaire has insisted none of his 12 UK sites will close.

Yet this week's decision to sell three plants in northern and central England plunges 1,500 jobs into uncertainty and comes after three of GFG's French auto parts factories sought bankruptcy protection last month.

Clive Royston, who represents the Community trade union at Liberty's Stocksbridge site in northern England, said he wants Liberty to be a "responsible seller" and find a buyer who will "not just strip off assets".

"We're worried and don't have any details. It's hard because they (workers) are asking questions and I can't answer," he told AFP.

- Liquidity crisis -

Supply chain finance firm Greensill contributed to GFG's expansion through short-term corporate loans and avoided the stricter regulations imposed on traditional banks.

But its abrupt collapse in March triggered a liquidity crisis at GFG as creditors sought to recall their loans.

It has been reported that Greensill had £3.5 billion ($5 billion, 4.1 billion euros) of exposure with GFG.

Greensill's lawyers claimed its demise could threaten 50,000 jobs worldwide.

Liberty has reportedly not repaid an £18-million loan to Metro Bank, which accuses it of breaching "covenants and restrictions". Liberty denies the claims.

Negotiations with Swiss banking giant Credit Suisse, which had 10 billion euros of exposure with Greensill, continue.

The UK government rebuffed Liberty's request for a £170-million bailout due to concerns over opaque corporate structure and governance.

- 'Red Flag' -

The risky nature of supporting distressed companies means investors either make huge profits or lose their whole investment, said Dirk Jenter, of the London School of Economics and Political Science.

As sustaining firms can be investors' best way to recoup their loans, "they (Liberty) are scrambling for money and trying to sell their most liquid assets. It's an attempt to buy time to keep the company alive," he added.

Gupta was the majority owner of the indebted Wyelands Bank, which was probed by the Bank of England in 2019 and wound down in March amid allegations of favouring Gupta's associates.

This month, the UK's Serious Fraud Office opened an investigation against GFG for alleged fraud, fraudulent trading and money laundering, including its financing activities with Greensill.

Jenter said this investigation and allegations of providing fake invoices would deter potential investors and compound Liberty's financial woes.

"It's a red flag. It would take an extraordinarily courageous investor to rely on the numbers provided by Liberty. It makes risking equity almost impossible," he told AFP.

- 'A foundational industry' -

Union representative Royston said coronavirus "crippled" Stocksbridge, which supplies the hard-hit aerospace sector, and stressed the need to protect jobs that have defined the region despite several ownership changes over the years.

"There's not much industry around us. Stocksbridge has been built around the plant. As a lad, you follow your father into the steelworks," he added.

David Bailey, from the University of Birmingham business school, said all British steel manufacturers faced broader challenges, including higher electricity prices and business rates.

A longstanding glut in the global steel market and Chinese dumping have also undercut British steelmakers.

"You might have a period where companies are successful for a while, then these problems raise their heads again. Liberty ran into issues that are more structural," he said.

"They were far too reliant on Greensill when it went under and left themselves too exposed."

Bailey believes the British government should intervene with an American-style conservatorship -- whereby the state runs and reforms companies before returning them to the private sector -- to improve competitiveness and prevent damage to related industries.

"There's a big threat to jobs and this is a foundational industry. We should be doing more to preserve it," he said.

UK business minister Kwasi Kwarteng recently told lawmakers nationalisation was "unlikely".

Government support for steelmakers is linked with decarbonisation as the sector pursues an 80-percent reduction in carbon emissions by 2035.

Liberty has committed to achieving carbon neutrality by 2030 by using more scrap metal and electric arc furnaces powered by renewable energy sources.

© 2021 AFP

UK

CRIMINAL CAPITALI$M

 Serious Fraud Office ‘steps up’ Liberty Steel investigation

©gfgalliance.com

Latest News
April 28 2022
Ben Ormsby

The Serious Fraud Office (SFO) has said it has stepped up its investigation into Sanjeev Gupta’s Gupta Family Group Alliance (GFG) which owns Liberty Steel following the £100m purchase of assets in 2017 from Tata Steel .


Sanjeev Gupta

Investigators issued notices under Section 2 of the Criminal Justice Act 1987 and attended addresses across the England, Scotland and Wales linked to GFG Alliance, to request documents including company balance sheets, annual reports and correspondence related to the SFO’s investigation which started in May last year into “suspected fraud, fraudulent trading and money laundering”.

A spokesperson for the SFO noted its investigators spoke with executives at multiple addresses who co-operated with the operation, and added: “As the investigation is ongoing, the SFO can provide no further comment”.

Liberty Steel which has operations across the country including Rotherham, Stocksbridge, Scunthorpe, West Bromwich and Kidderminster earlier this month Liberty Steel confirmed it would be cutting 207 jobs, as the business looked to restructure and recover from a turbulent period that started with the collapse of its key lender Greensill Capital.

The update comes days after the Financial Times reported that French police raided Gupta’s Paris offices and metalworks – Aluminium Dunkerque – it formerly owned as the French prosecutors looked to escalate their probe into his business dealings.

Sky News and the BBC reported that an internal memo to GFG staff on Wednesday said: “We will comply with the information request orders and will continue to cooperate fully in all manners.

“We have in place very strict information and document preservation policies which we implemented prior to the SFO announcement….We appreciate these enquiries can be disruptive and concerning for employees and stakeholders.

“However, we are encouraged that the investigation is now progressing and is moving closer to a conclusion.”

The company’s chief transformation officer Jeff Kabel added: “Rest assured that this does not impact the operation of our companies and we must continue to focus on our business plans and operating safely”.

GFG has continuously denied all wrongdoing, but the investigation is just one of the challenges which has faced Gupta’s business empire over the last 12 months.

The updates to the SFO and French investigation are just the latest development in the Liberty Steel story which has seen the government reject of a request from GFG to approve an emergency £170m bailout, MP’s call for investigations to stave off another crisis in the industry in November and reports in February warning up to 2,000 jobs were at risk when a winding up petition has been issued against Speciality Steel UK a division of Liberty Steel, before the petition was withdrawn last month by HMRC.

CRIMINAL CAPITALI$M
UK fraud watchdog investigating GFG Alliance

LONDON (Reuters) - Britain's Serious Fraud Office (SFO) is investigating Gupta Family Group Alliance, including its financing arrangements with collapsed Greensill Capital, it said on Friday.

© Reuters/Russell Cheyne FILE PHOTO: The GFG Alliance flag flies at the completion of a 330 million pound deal to buy Britain's last remaining Aluminium smelter in Fort William Lochaber Scotland

"The SFO is investigating suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance (GFG), including its financing arrangements with Greensill Capital UK Ltd," the SFO said in a statement.

© Reuters/RUSSELL CHEYNE FILE PHOTO: A view of the Lochaber Aluminium smelter and hydroelectric site, which is owned by Sanjeev Gupta's GFG Alliance, at Fort William

A representative of GFG Alliance, steel magnate Sanjeev Gupta's family conglomerate, said the group had no immediate comment on the matter.

The SFO said it had no further comment given it was a live investigation.

GFG Alliance, Gupta's privately held conglomerate, has relied heavily on Greensill Capital to fund its operations.

Greensill is facing insolvency after its main insurer stopped providing credit insurance on $4.1 billion of debt in portfolios it had created for clients including Credit Suisse.

Britain's Financial Conduct Authority said on Tuesday it was formally investigating the UK operations of supply chain finance company Greensill as part of global probes.

Greensill lent money to firms by buying their invoices at a discount, but collapsed in March 2021 after insurers pulled their cover.

(Reporting by Huw Jones; editing by David Goodman and Jason Nee

Sanjeev Gupta's GFG Alliance strikes debt deal with Credit Suisse
Sun, October 10, 2021, 1:38 PM·1 min read


 Liberty Steel's Sanjeev Gupta pictured in Scotland


LONDON (Reuters) - The GFG Alliance said on Sunday it had agreed a debt restructuring deal with Credit Suisse for its Australian steel and coal mining assets, and announced plans to inject 50 million pounds ($68 million) into the restart of its Rotherham electric furnace in the United Kingdom.

GFG, owned by commodities tycoon Sanjeev Gupta, has been scrambling to refinance its cash-starved web of businesses in steel, aluminium and energy after supply chain finance firm Greensill Capital filed for insolvency in March.

The debt restructuring for its Australia assets will allow GFG to make a "substantial upfront payment" to Greensill Bank and Credit Suisse, with the balance paid in instalments until the new maturity date of June 2023, a statement from GFG said.

Zurich-based Credit Suisse had previously disclosed some $2.3 billion worth of loans exposed to financial and litigation uncertainties within Greensill-linked supply chain finance funds, with some $1.2 billion of its assets related to GFG.

Following the cash injection into its UK steel business, Liberty Steel, production will start in October with a plan for output to reach 50,000 tonnes per month as soon as possible, the statement said.

Jeffrey S. Stein, the chief restructuring officer, said in the statement that new lenders in Europe had expressed interest in refinancing GFG's steel assets.

In Europe, GFG said it had launched a legal action against private equity firm AIP, which said it had taken control of GFG's smelter in Dunkirk, Europe's largest primary aluminium producer.

($1 = 0.7332 pounds)

UK

Liberty Steel set to snap up Tata's Port Talbot steelworks


LaToya Harding
·Contributor
Sat, 21 November 2020

Over the weekend Sanjeev Gupta’s company announced that Swedish firm SSAB was negotiating with Tata over buying its assets in the Netherlands. 

Photo: Reuters/Toby Melville TPX

Indian conglomerate Liberty Steel is poised to snap up Tata’s (TATASTEEL.NS) UK steelworks at Port Talbot in Wales, it has been revealed.

Over the weekend Sanjeev Gupta’s company announced that Swedish firm SSAB (SSAB-A.ST) was negotiating with Tata over buying its assets in the Netherlands. CityAm reported.

If confirmed, the move would lead to the break-up of the group’s European steel operations.

Tata’s Port Talbot steelworks, which currently employs around 8,000 people, has been looking for emergency government funding over the last few months. Last week it revealed it was reviewing all options to ensure the UK business was “self-sustaining” in the future.

Tata Steel UK made a pre-tax loss of £654m ($869m) for the previous financial year. Back in 2016 Liberty Steel submitted a previous bid for the Port Talbot site after Tata put it up for sale. However, it later backtracked and decided to hold onto the plant.

Sources close to Liberty Steel told CityAm that in the event that no funding was forthcoming, Gupta’s firm, which has an appetite for struggling metals businesses, would be a willing buyer.

READ MORE: SSAB eyes Tata Steel's Dutch assets as European consolidation picks up

It comes as Liberty, which is part of Gupta’s GFG Alliance, has submitted a bid for German conglomerate Thyssenkrupp’s (TKA.DE) struggling steel division, potentially creating a disruption behemoth in a crowded European market.

Earlier this month it was in talks with the German government over an aid package worth at least €5bn ($5.9bn, £4.5bn).

At the time, sources familiar with the matter told Bloomberg that Chancellor Angela Merkel’s government signaled a willingness to provide financial support to shore up the unit and ensure future domestic production of an environmentally friendly form of steel.

Troubled Thyssenkrupp will likely lose €1bn this year, according to the Financial Times.

Liberty Steel declined to comment.

Watch: Thyssenkrupp to cut cut another 5,000 jobs

UK

Government ‘negligence’ to blame for steel firm’s collapse, says union

Anna Wise, PA Business Reporter
Wed, 8 February 2023

Government negligence is to blame for the collapse of British steel business Aartee Bright Bar, a steelworkers’ union has claimed.

Aartee Bright Bar, which says it is the UK’s largest distributor of engineering steel products, called in administrators Alvarez & Marsal (A&M) on Tuesday after facing tough economic conditions and surging metal costs.

The leading trade union for steelworkers, Community, hit out at the Government for failing to act sooner over issues including increased energy costs, which have heaped pressure on struggling firms in the sector.

The West Midlands-based business has around 250 staff, operating from two productions sites in Willenhall and Dudley, and three distribution and sales offices in Rugby, Bolton, and Newport in South Wales.

It is not yet known whether there will be an impact on jobs following the insolvency.

Michael Magnay, joint administrator at A&M, said: “Like many businesses in its sector, Aartee Bright Bar has been facing significant headwinds as a result of the challenging economic environment and fluctuating steel prices.

“Against this backdrop, administrators have been appointed and we are exploring the options available to preserve value.”

Trade union Community argued that the business’s collapse was representative of the pressure the wider industry was facing, particularly from high energy and metal costs.

Alun Davies, national officer for Community, said: “The news of Aartee Bright Bar crashing into administration is extremely worrying.

“All parties must do whatever it takes to protect the workforce in this difficult process.

“These developments demonstrate the extreme pressures the industry is under.

“This is the price of Government’s negligence and its failure to act on issues like energy costs and procurement.”

The news follows reports last week that British Steel is planning to axe hundreds of jobs as part of closures of its coke ovens in Scunthorpe, according to a union source.

The Government is reportedly considering cash injections into both British Steel and Tata Steel UK.

But Charlotte Brumpton-Childs, national officer at the GMB union, said the Government’s investment was a “sticking plaster that does nothing to help the long-term structural issues affecting our steel industry”.

She added that the steel industry could “wither and die like so much of our proud manufacturing heritage” without meaningful support.

Furthermore, Liberty Steel revealed last month it was implementing the next stage of its restructuring programme which could affect up to 440 jobs.

The firm said it needed to refocus its operations in order to adapt quickly to the challenging market.

Liberty Steel, headed up by Sanjeev Gupta, counts Aartee Bright Bar as one of its customers, according to reports.

There are more than 33,000 people directly employed by Britain’s steel industry and a further 40,000 working in the steel supply chain, Community said.

Britain’s steel industry will be worth £6 billion by 2030.

Liberty Steel customer Aartee Bright Bar crashes into administration


Tue, 7 February 2023 


A major customer of Britain’s third-biggest steel producer has been forced to call in administrators, deepening the financial gloom engulfing the industry.

Sky News has learnt that Aartee Bright Bar, which is based in the West Midlands and employs 250 people, has this week drafted in Alvarez & Marsal to handle an insolvency process.

Liberty Steel is part of the industrial conglomerate headed by Sanjeev Gupta.

Mr Gupta is reported to have close ties to Ravi Trehan, Aartee's founder, while Greensill Capital, the controversial supply chain finance group which itself collapsed in 2021, is said to have financed a number of trades between the two.

Michael Magnay, Joint Administrator at A&M, said in a statement issued to Sky News: "Like many businesses in its sector, Aartree Bright Bar has been facing significant headwinds as a result of the challenging economic environment and fluctuating steel prices.

"Against this backdrop, Administrators have been appointed and we are exploring the options available to preserve value."

A steel industry source said on Tuesday that Liberty Steel would be an obvious buyer of Aartee Bright Bar's assets out of administration.

A spokesman for Liberty Steel declined to comment, although a source close to it said it would "look at how it could help".

Aartee, which also has offices in Lancashire and Wales, is a manufacturer, stockist and distributor of steel products.

A statement purportedly made on behalf of Aartee Bright Bar, which was issued by email from Aartee Group, said: "Despite the very significant challenges facing the UK steel industry Aartee Bright Bar (ABB) has been making regular and substantial payments to its creditor FGI. It is therefore disappointing that FGI has chosen to enforce on a small remaining debt which the business has a plan to clear in the very near future.

"The management of ABB will work speedily to ensure the matter is resolved quickly with the administrator."

Its insolvency comes amid talks between the government and Liberty Steel's two larger competitors - Tata Steel and British Steel - about £600m of taxpayer funding to aid their transition to greener electric arc furnaces.

The funding for British Steel has been thrown into doubt by its Chinese owner's plan to axe about 800 jobs, mainly at its Scunthorpe plant.

Mr Gupta has also announced proposals to cut hundreds of jobs across his UK operations.

CRIMINAL CAPITALI$M

GFG Alliance faces fraud investigation as financing crisis deepens

EUROPE / 14-05-21 / BY JOHN BASQUILL



The UK’s Serious Fraud Office (SFO) has an­n­ounced it is investigating potential fraudulent trading and money laundering at GFG Alliance, dealing another serious blow to the group’s efforts to find emergency funding after the collapse of Greensill.

The SFO announced on May 14 it would probe “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance (GFG), including its financing arrangements with Greensill Capital”.

It is the first time enforcement authorities have announced an investigation into the alliance, which is headed by metals magnate Sanjeev Gupta. Members include several UK-based steel industry companies, as well as trading house Liberty Commodities.

The SFO says it cannot comment further as its investigation is ongoing. A GFG spokesperson says the group notes the announcement and “will co-operate fully with the investigation”.

“GFG Alliance continues to serve its customers around the world and is making progress in the refinancing of its operations which are benefitting from the operational improvements it has made and the very strong steel, aluminium and iron ore markets,” the spokesperson adds.

The investigation stems from the insolvency of Greensill, which until its collapse in March was a major source of funding to GFG Alliance companies.

The Financial Times revealed that as part of Greensill’s insolvency proceedings, administrators Grant Thornton approached several firms with outstanding invoices from Liberty Commodities – only to be told they had never done business with the company.

Gupta has since said outstanding invoices are part of future receivables programmes, whereby Greensill would provide funding against invoices that it expected to generate in future.

In some cases, he says, those were from companies merely “identified as a potential customer” rather than those already trading with Liberty.

US-based mining company Bluestone Resources has made the same claims in a lawsuit against Greensill, alleging that Greensill executives helped draw up a list of potential customers as the basis for providing finance.

But Greensill has attempted to distance itself from that practice. Founder and chief executive Lex Greensill insisted to a UK parliamentary inquiry this week that the company only funded future receivables programmes where there was a history of real trading activity.

David Cameron, former UK prime minister and a Greensill advisor until its collapse, added at a second hearing that the allegations against GFG “are very disturbing, if true”, but that he had no knowledge of those arrangements.

“It seems concerning and I’m sure it needs to be got to the bottom of,” he said.

Accusations of questionable activity linked to GFG Alliance have emerged several times in recent years, however.

The group has struggled to attract bank financing after several institutions terminated relationships between 2016 and 2018, citing concerns of questionable activity. Several industry representatives told GTR in April that the appetite for lending to GFG was already close to zero.

There had been some glimmers of hope for Gupta, with his steelmaking business in the UK reaching an agreement for a £200mn loan from US asset manager White Oak in May, according to Bloomberg.

White Oak has since confirmed it has terminated the agreement with GFG, however. “As with any regulated financial institution, we are not in a position to continue discussions with any company that is under investigation by the Serious Fraud Office for money laundering,” the company says.

Trade finance experts say that view would likely be shared across the sector.

“It would be highly unlikely if not impossible to get any level of financing for your business while being investigated for serious fraud,” says Oliver Chapman, group chief executive at supply chain procurement firm OCI, speaking to GTR.

“One must question any financier who would want to go near a business in that situation. And with the high levels of due diligence within the industry now, I don’t think a financier could be seen to be working with a company being investigated, from a perception point of view – even if there was a sound business case.”

Sean Edwards, chairman of the International Trade and Forfaiting Association (ITFA), adds: “Our members would be very careful about dealing with a company that’s under an investigation like this.”

Public sector lending has also been refused, with UK ministers citing concerns over the group’s opaque structure.

UK business secretary Kwasi Kwarteng said in April that the wider group “has financial problems that we have not really got to the bottom of” and so approving its request for a £170mn bridge loan would be “very irresponsible”.

BlueScope leads global steel giants in push for Gupta’s Whyalla plant

Reuters | August 3, 2025 | 

Credit: Whyalla Steelworks

Australia’s BlueScope Steel said on Monday it has assembled a heavyweight consortium of global steelmakers to bid for Sanjeev Gupta’s troubled Whyalla Steelworks, over a month after the local government formally opened a sale process.

The group — comprising Japan’s Nippon Steel, India’s JSW Steel and South Korea’s POSCO — brings a combined market value of A$115 billion ($74.4 billion), and is eyeing the South Australian plant as a future hub for low-emissions iron production for domestic and export markets.

Rio Tinto, BHP, and BlueScope to build ‘green iron’ plant

The consortium has lodged a non-binding expression of interest but has yet to submit a formal bid.

Whyalla Steelworks was placed in administration in February, after its operating company collapsed under tens of millions in debt. The Australian and South Australian governments stepped in with a joint A$1.9 billion rescue package to safeguard local jobs and preserve a key piece of industrial infrastructure.

Australia formally opened the sale process in June, citing strong global interest from companies seeking a foothold in the emerging green steel economy.

Gupta’s family conglomerate, GFG Alliance, was not immediately reachable for a Reuters request for comment.

($1 = 1.5466 Australian dollars)

(By Rishav Chatterjee; Editing by Sandra Maler)

 

Czech government says two investors are interested in taking over Liberty Steel’s insolvent Czech operations

Liberty Ostrava entered insolvency proceedings last week. / bne IntelliNews

LinkedInFeedly

By Albin Sybera June 19, 2024

Two investors are reportedly interested in taking over Liberty Ostrava, the largest Czech steel mill, which entered insolvency proceedings last week.

Czech Minister of Labour and Social Affairs Marian Jurecka said he know of two "very seriously interested” investors, adding that “it cannot be ruled out that next week or the week after another will appear”.

Online news outlet Seznam Zpravy (SZ), reported earlier that defence and heavy industry conglomerate Czechoslovak Group (CSG), financial group Creditas and and local regional metals company Trinecke zelezarny are among the potential investors into Liberty Ostrava.

The steelworks, owned by struggling British-based Liberty Steel,  part of industrialist Sanjeev Gupta’s GFG Alliance, has shuttered most of its production since the end of last year when its key energy provider Tameh Czech stopped supplies to the plant over missing payments.

Employees have been on paid leave since then and the company management pursued a reorganisation plan which was backed by the majority of creditors under a court moratorium protecting Liberty Ostrava against creditors.

However,  without any warning, last Friday Liberty Ostrava appeared in the insolvency registry, with stated liabilities exceeding CZK5bn.  

Liberty Steel later said that,  "given the ongoing material risks and uncertainties facing Ostrava, Liberty has decided the right course of action is to initiate a sale of Ostrava’s operations and withdraw the preventative restructuring plan in order to enter into a judicial reorganisation under the Insolvency Act".

The company said the reorganisation would  "provide the time and protection to undertake the sales process and further restructuring measures to stem losses".

The company blamed market conditions – namely global oversupply and historically high imports into Europe from countries which face much lower regulatory and decarbonisation costs. Soaring energy and coal prices and falling steel demand and prices following Russia’s invasion of Ukraine have hurt a sector already struggling to adapt to European Union environmental rules that reduced competitiveness compared to Asian rivals. 

It also pointed to the Czech goverment's failure to transfer emission permits to Liberty Ostrava. Relations between the British-based group and the Czech government have all but broken down, with Czech ministers accusing the indebted group of failing to communicate and of moving money out of the company to other operations.

The government has refused to run to the aid of Liberty Ostrava and now appears determined to transfer its operations to a domestic investor.

SZ’s commentator Petr Holub and editor-on-chief of Reporter magazine, Petr Holub, have pointed out that for a potential takeover, the insolvency court would first have to turn down Liberty Steel's proposed reorganisation, which could take  “weeks or months”.

Jurecka made his comments after a meeting with Liberty Ostrava’s labour unions and representatives of the labour office on Tuesday, June 18, where state aid to Liberty Ostrava’s employees was discussed.  “If the plant is to re-start again then we need to keep the people, and not have them quit en masse,” Jurecka told the media.

“We view positively that strategic investors are appearing. I firmly believe that we will maintain as many workplaces as possible,” head of the labour union KOVO Roman Druco was quoted as saying by Czech Television (CT), which also cited the general director of the country’s Labour Office, Daniel Kristof, as saying that 437 employees had filed a request for salary remuneration as of Monday. Under Czech law the state can cover missed salary payments in the event of company insolvency.  

Kristof said that his office could start with the salary payments next week and estimated the costs to be around CZK1bn (€40mn). Before entering insolvency, Liberty Ostrava had around 5,000 employees, according to the reports in the Czech public media.  Unions say up to 30,000 jobs in total are dependent on the plant in what is one of Czechia’s poorest regions.