Sanjeev Gupta’s global group has been hit with a $US53m judgment after failing to attend court

A $US100m debt package to help pay GFG Alliance’s creditors at Whyalla is yet to eventuate, while another company in Sanjeev Gupta’s empire has been hit by a $US53m court judgment.

A $US100m debt facility which GFG Alliance was relying on to bolster cashflow and provide “critical” capital into Whyalla’s steelworks in SA’s far upper north has yet to be signed off, weeks after it was initially expected.

Meanwhile, the global business has also been stung by a $US52.8m judgment in a London court case where it argued it could not afford a lawyer.

GFG Alliance in late November said it had negotiated $159m in new debt to provide capital for the Whyalla steelworks, and that the money earmarked to fund ongoing maintenance work and payments to suppliers.

The company said a term sheet had been signed with an unnamed “major global credit fund” to provide the money.

GFG, headed by British industrialist Sanjeev Gupta, on Thursday said negotiations over the funding were still ongoing.

“GFG Australia has negotiated a term sheet for $US100m from a major global credit fund,’’ a spokeswoman for the company said.

“We are working through the due diligence process and expect to finalise the funding in next few weeks.’’

Steel being produced in the South Australian city of Whyalla. Picture: Ben Clark

The company is also yet to file its annual reports for the 2024 financial year for Liberty Primary Metals Australia (LPMA), which owns and operates the steelworks, and Infrabuild which manufactures and distributes steel products.

The financial reports for LPMA are generally filed by the end of December.

“We are working with our auditor through the FY24 financial audit process which is currently ongoing,’’ the company said on Thursday.

Meanwhile a judgment was handed down in London’s High Court in late January, awarding ArcelorMittal and Nippon Steel $US52.8m in damages for money owed by a subsidiary of Mr Gupta’s Liberty Group – also part of GFG Alliance.

The judgment relates to a complex funding arrangement set up between the Singapore-based Liberty subsidiary and India’s Essar Group – now owned by ArcelorMittal and Nippon Steel – which turned over more than $US1.1bn in the years it was in operation.

While the mechanics of the funding and steel supply agreements are complex, the judge in the matter opined that the claimant “contends that it paid this money … in anticipation of and/or pursuant to a ‘contract for purchase of steel products’, which envisaged steel or services being provided to the claimant by the defendant, but it never actually received any steel or services’’.

“The background to these payments is controversial and, even on the claimant’s own case, somewhat shadowy and mysterious,’’ the judge said.

“A puzzling transaction is rendered opaque by the fact that the claimant itself has only limited information about what happened back in 2014-2016, having been subject to a corporate restructuring since those events.

“The mysteries have deepened further as a result of the defendant’s decision to stop participating in the current proceedings.’’

The judgment says Mr Gupta’s solicitors wrote to the court saying, the company “will no longer be able to take part in nor will it be represented at the above proceedings as it cannot afford continued appropriate legal representation”.

The judge said the court heard nothing from the defendant after October 23 last year.

“I am in no doubt that the defendant was fully aware of the trial date and made a deliberate decision not to attend or be represented,’’ the judgment says.

“Indeed, Mr Gupta, for the defendant, made clear that that was what the defendant had decided in his letter of October 9, 2024.

“It was said that the decision was made for financial reasons, but that assertion is not explained.

“If it matters, I do not accept, in the absence of any evidence, that the defendant is unable to attend for financial reasons.

“Until August 2024, the defendant was able to pay a top international law firm and leading counsel to act for it. I would need a proper explanation as to what has changed to mean that it cannot now afford to be represented at court in any form.’’

The judge said he also dismissed the defendant’s counterclaims due to its non-attendance at trial, but added he would have rejected the counterclaims on their merits also.

This week the South Australian government revealed GFG owed it royalties “in the tens of millions” of dollars and that the government’s $593m hydrogen ambitions for the region were now imperilled by the failure of GFG to realise its plans to modernise the steelworks.

SA Treasurer Stephen Mulligan said expected royalty payments were not received last week and the company was in arrears by six months. He said he was unaware of any other companies failing to pay their SA royalties.