Sanjeev Gupta blasts aggressive tactics of Greensill Capital creditors

Knee-jerk reactions by Greensill’s creditors are threatening tens of thousands of jobs, according to Sanjeev Gupta.

GFG Alliance boss Sanjeev Gupta.

Sanjeev Gupta has blasted the aggressive tactics of creditors as “dangerous and cavalier”, threatening thousands of jobs in his global empire, and will fight claims made by banks exposed to collapsed financier Greensill Capital.

The industrialist has struggled to contain the fallout after his biggest lender, Greensill, sank into administration with Credit Suisse seeking to liquidate several of its steel and commodity businesses in Australia and the UK including Whyalla.

As his GFG Alliance scrambles to refinance about $US5bn ($6.5bn) owed to Greensill, Mr Gupta shot back at creditors in a last-ditch plea as he seeks to rescue the mining and metals business.

“I am concerned that short-term, aggressive tactics by some of Greensill’s creditors are threatening tens of thousands of long-term jobs here in the UK and elsewhere,” Mr Gupta wrote in The Times on Friday.

“These creditors are at risk of destroying their own chance of recouping value by taking these knee-jerk actions. They undermine profitable businesses and ultimately put at risk thousands of skilled, industrial jobs in communities with limited alternative employment opportunities.”

Credit Suisse had $10bn of funds invested in loans arranged by Greensill which included debts packaged up by businesses run by Mr Gupta.

He says the demands of creditors are crunching its ambitions to achieve a turnaround.

“We do now face unwanted headwinds. Financial institutions with investments connected to Greensill are now trying to bring claims against us. We will of course robustly defend our legal position, including in the courts if necessary. Our clear priority must be to protect the long-term future of our people and local communities,” Mr Gupta wrote.

“I’m ready to change. So is the GFG Alliance. We understand that the way we used to finance our operations needs to be overhauled, and we will address our challenges head on. We want to continue to improve governance and transparency. We also understand that we have a responsibility to our debt holders. But at this time of crisis, we need cool heads and collaboration, not dangerous and cavalier behaviour.”

The Morrison government on Thursday confirmed it is working on a back-up plan to keep the Whyalla steelworks afloat, after a move by creditors to seize control of his local industrial operations.

Minister for Finance Simon Birmingham said it was closely following the unfolding situation after a court action to wind up OneSteel Manufacturing, owner of Whyalla, and the Tahmoor coal mine had put 2000 jobs on the line.

Mr Gupta’s GFG said on Wednesday it was considering term sheets from “large investment funds” that would be more than enough to repay creditors.

The court wind-up hearing is set for May 6 and follows parallel action in the UK courts amid attempts by Mr Gupta to secure about $500m in new funding for his Whyalla steelworks to plug the funding gap left by the demise of Greensill Capital.

“Our global refinancing is making progress — in Australia, for example, we have entered advanced due diligence with a number of interested parties to refinance our primary steel and mining operations. This would provide enough capital to repay the creditors of that business in full,” Mr Gupta said on Friday.

Mr Gupta repeats a claim that Greensill was the only bank that would back him when the business started in 2013 and wants to deliver on a promise to boost transparency first made in 2018.

Fears are growing over the future of thousands of Australian workers just five years after Mr Gupta was hailed as a saviour for rescuing Whyalla from administration as part of a rapid-fire $15bn global acquisition spree.

“We’ve all learnt a lot in the past five weeks since the collapse of Greensill. Not least me. I’ve spent a lot of time wondering what I should have done differently, and when, so I might have avoided the current challenges the GFG Alliance now faces. As we are a family-run business I take full responsibility for finding a way through this solution,” Mr Gupta wrote.

The UK government is considering nationalising parts of Sanjeev Gupta’s steel empire after it rejected the British industrialist’s plea for a £170m ($307m) rescue package.