GFG Alliance updates
Signal as much as myFT Every day Digest to be the primary to find out about GFG Alliance information.
Sanjeev Gupta’s metals conglomerate GFG Alliance is in talks with White Oak World Advisors about refinancing his European operations, in a deal that would finish months of uncertainty for hundreds of steelworkers.
The San Francisco-based non-public finance group has already stepped in to supply new funding for GFG’s Australian metal plant and related mines however talks between the 2 have lately broadened out to incorporate different components of Gupta’s empire, a number of individuals conversant in the state of affairs have confirmed.
GFG’s European property embody metal mills in Romania and the Czech Republic. A possible deal, if agreed, may additionally see White Oak — alongside the broader GFG group — present financing for Gupta’s beleaguered UK operations, two individuals conversant in the talks stated.
The US finance group had provided to supply a £200m mortgage to the group’s UK property within the spring however these talks faltered after the Critical Fraud Workplace introduced it had launched a probe into suspected fraud at Gupta’s empire. GFG has denied wrongdoing and stated it could co-operate with the watchdog.
The SFO probe and the collapse in March of its fundamental monetary backer Greensill Capital plunged GFG into disaster earlier this 12 months. The unfastened conglomerate of corporations, which incorporates Liberty Metal, employs 35,000 individuals at metalworks stretching from Wales to Australia. Within the UK, GFG employs some 5,000 individuals, together with 3,000 steelworkers.
A brand new financing package deal for the UK crops may see a mix of contemporary funding from White Oak in addition to the GFG group, one particular person stated, whereas cautioning that a number of choices have been being thought of. Together with different steelmakers, GFG is benefiting from a world growth in commodities, the particular person added. One possibility being mentioned would contain the creation of a separate buying and selling entity to make sure transparency.
Contemporary financing would allow GFG’s speciality metal crops in Yorkshire, which have suffered from a scarcity of working capital, to restart manufacturing. They’ve been working on an advert hoc foundation over the previous 12 months. Stocksbridge, one in all GFG’s speciality metal crops in Yorkshire, which was put up on the market earlier this 12 months, remains to be anticipated to be bought if a purchaser might be discovered, sources confirmed.
White Oak’s connections with GFG usually are not new. The agency already has existing exposure to the conglomerate and has beforehand supplied financing on to Liberty.
White Oak additionally agreed a take care of Greensill final 12 months to purchase a few of its publicity to Gupta’s commodities buying and selling enterprise. The gross sales helped to alleviate strain on Greensill when it was coming below escalating scrutiny from regulators for its excessive stage of danger tied to the metals magnate’s group.
GFG and White Oak each declined to remark.
Gupta is below strain to agree new funding after securing much-needed breathing space from creditors earlier in the summertime.
The industrialist received a reprieve from teams together with Credit score Suisse over unpaid money owed final month. The Swiss financial institution, which is pursuing him for $1.2bn owed to its group of supply-chain finance funds, agreed to delay authorized motion to pressure a few of Gupta’s corporations out of enterprise to September.
Individually, the tycoon’s makes an attempt to refinance GFG’s French and Belgian aluminium property with miner Glencore have been held up by authorized motion. GFG earlier this month accomplished the sale of two French steelmaking operations to Germany’s Saarstahl.