Gupta’s GFG flags restructuring to pave way for new funding

Sanjeev Gupta’s GFG Alliance has confirmed a series of restructuring steps as the metals tycoon strives to refinance his sprawling conglomerate and pay back creditors. 

The company on Monday said the restructuring would allow it to “refocus its business, protect jobs and develop further its remaining assets”. 

GFG said it was still looking for a buyer for its UK speciality steel plant at Stocksbridge in South Yorkshire and announced the departure of the managing director of its British steel operations, Jon Ferriman.

Ferriman, who will step down on Friday, will be replaced by Roy Chowdhury, another steel industry specialist, who will take up the role of chief executive at the company.

GFG, whose assets span steel, aluminium and energy businesses around the world, has been teetering on the brink since the collapse of its main lender Greensill Capital in March. It is also under investigation in the UK over suspected fraud.

The company on Monday said it had reached a framework agreement with Greensill Bank’s administrators for “positive direct engagement to achieve an amicable resolution”. 

The metals group last week reached a six-week standstill agreement with Credit Suisse, one of its main creditors, on its Australian steel and coal mining assets. Credit Suisse has been pursuing Gupta for $1.2bn owed to its group of supply-chain finance funds.

The Financial Times revealed last week that Gupta had won a three-month reprieve from legal action to force some of his UK companies out of business after Credit Suisse agreed to delay the proceedings. 

The standstill agreement with Credit Suisse only covers its Australian assets. It will allow GFG time to finalise talks with US investors, White Oak Global Advisors and Guggenheim, to refinance the Australian assets.

GFG also announced it was exploring a possible sale or strategic partnerships for two smaller Australian energy businesses, including a solar farm.

In addition, the group said it was in talks with interested parties to refinance its steel operations in continental Europe, notably in Romania and the Czech Republic. It said it would merge its steel activities in Belgium, Luxembourg and Italy into the Romanian business. 

The company said it was still looking to sell the Stocksbridge plant, which makes parts for aerospace and automotive customers. A sale would allow it to focus on its primary steelmaking activities at Rotherham.

GFG confirmed it was exploring “strategic options” for its UK engineering assets that make parts for automotive companies including Jaguar Land Rover. 

Gupta said in a statement that the “refinancing of the group, which is progressing well, brings closer the point of being able to honour our obligations to creditors”.