Sanjeev Gupta’s GFG Alliance wins six-week reprieve on Credit Suisse liquidation move
Sanjeev Gupta has won a six week reprieve from the threat of liquidation of his Australian coal and steelmaking businesses.
Sanjeev Gupta has won a six week reprieve from the threat of liquidation of his Australian coal and steelmaking businesses at the hands of global banking giant Credit Suisse, with the two sides agreeing to put aside a debt dispute to allow GFG to put the final touches on a $430m refinancing package.
Mr Gupta’s GFG Alliance said on Wednesday it had signed off on a six week standstill agreement with Credit Suisse to allow it to restructure its ongoing financing arrangements through a new debt package.
Credit Suisse filed winding-up orders against the Whyalla steelworks and other parts of the Liberty Primary Metals business in late April in its quest to recover money it says is owed through Mr Gupta’s complex relationship with Greensill.
In early May GFG said it had struck a deal with White Oak Global Advisors for the $430 million owed by Liberty Primary Metals Australia, the parent company of the Whyalla steelworks and Tahmoor colliery in NSW.
The liquidation action, filed by Citibank on behalf of Credit Suisse, is due to return to the NSW Supreme Court on August 2 and the standstill agreement gives GFG time to close out its new financing package before the matter returns to the courts.
“GFG Alliance and Credit Suisse Asset Management (CSAM) have agreed a formal standstill agreement with regard to Liberty Primary Metals Australia (LPMA), which includes the integrated mining and primary steel business at Whyalla and its coking coal mine at Tahmoor,” the company said in a statement on Wednesday.
“The six week standstill agreement will enable GFG Alliance to complete full refinancing of LPMA, expected to complete within this time frame.”
Mr Gupta’s UK-based conglomerate has been under pressure since the collapse of its major financial, Greensill Capital, to refinance up to $US5 billion ($6.5 billion) of global debt globally issued by Greensill which was then bundled into bonds sold on to clients of Credit Suisse.
Greensill’s collapse in March coincided with moves by the global banker to wind up those supply chain financing funds, triggering a brawl with GFG over how much of that Greensill-originated debt was owed to Credit Suisse and its clients in the supply chain funds.
A spokeswoman for GFG said the company was still working with Credit Suisse to resolve the company’s remaining exposure to the banker’s funds following the collapse of Greensill.
In addition to debt refinancing negotiations, GFG has also been seeking to sell non-core assets, putting the company’s planned Cultana Solar Farm and Playford big battery projects in South Australia on the market in early May, and was also reportedly looking to sell off some of its UK engineering businesses.
It has also been looking for buyers for UK-based Liberty Aluminium Technologies, a supplier of parts to Jaguar Land Rover – which is reportedly on the brink of collapse if its bankers do not agree to a similar standstill agreement to consider offers from potential buyers.
As Mr Gupta scrambles to save his global metals and manufacturing empire from its creditors, GFG also faces troubles on the regulatory front, with the UK’s Serious Fraud Office confirming last month that it had launched an investigation into suspect transactions at GFG, including its financing arrangements with Greensill. The company has denied any wrongdoing.
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