Sanjeev Gupta set to win £ 200million loan to save Liberty Steel | Steel industry
Metals tycoon Sanjeev Gupta is set to secure a £ 200million loan for Liberty Steel UK, which would provide a lifeline for Britain’s third-largest steel company and help avert thousands of losses in jobs.
It is understood that the billionaire has agreed on financing terms with White Oak Global Advisers, which is also providing new financing to the Australian arm of Gupta’s sprawling holding company, GFG Alliance.
Liberty Steel’s future has been on the line since its main lender, Greensill Capital, fell into administration last month, causing a cash crunch for one of the UK’s largest steel producers.
As Gupta tried unsuccessfully to secure a £ 170million UK government bailout in March, the prospect of new funding from a private donor could allay fears over Liberty Steel’s own collapse.
If approved, White Oak’s loan would allow Liberty Steel UK to resume full production, after intermittently halting operations at some of its factories to preserve cash after Greensill’s failure, one person said. aware of the file.
GFG Alliance, White Oak and Credit Suisse declined to comment.
In total, GFG’s UK operations include 11 steel plants in Britain, including Stocksbridge and Rotherham in South Yorkshire, as well as an energy company and aluminum smelter in Scotland. Around 3,000 of GFG’s 5,000 employees in the UK are employed by its Liberty Steel UK division.
However, the White Oak loan would require approval from Credit Suisse, which holds a claim on Liberty Steel UK through loans provided by Greensill Capital. The Swiss bank also managed multibillion-pound investment funds that sold pooled loans to high net worth individuals, through a complex system designed by Greensill.
It is understood that none of the funds will be used to help offset a portion of the £ 3.6 billion that GFG Alliance has borrowed from Greensill. Reports suggest that Gupta’s UK steel business alone owes Greensill $ 769million (£ 553million).
Greensill’s trustees in Grant Thornton are still struggling to get money from debtors like Gupta. Meanwhile, Credit Suisse has filed for the liquidation of various Liberty Steel companies in the UK and Australia in an attempt to recover money for clients who have invested in Greensill loans which have been consolidated as a investments and sold through a series of Credit Suisse funds. These investment funds were worth nearly $ 10 billion before they closed in March.
Gupta – who is currently in Dubai – should be summoned before British deputies of the Business, Energy and Industrial Strategy Committee (BEIS) this summer, as part of a series of investigations related to the collapse of Greensill Capital.