Gupta’s Liberty Steel and Credit Suisse in talks over standstill deal

Sanjeev Gupta has held crunch talks with Credit Suisse about a standstill agreement over debts the industrialist’s GFG Alliance owes the bank in relation to its Australian steelworks. 

In a statement on Monday, Liberty Steel, the steel arm of GFG, said talks with Credit Suisse on a formal standstill agreement were “advanced”. Both parties had also made “significant progress in agreeing a framework to resolve GFG Alliance’s remaining exposure with Credit Suisse”, the company said. 

The talks, if successful, could remove a major roadblock in the metal tycoon’s attempts to refinance his sprawling empire, which has been teetering on the brink since the collapse of its main lender, Greensill Capital. 

Credit Suisse lent $1.2bn to GFG through its $10bn suite of supply-chain finance funds, which the bank was forced to suspend in March after Greensill’s insurer refused to renew cover. 

An agreement with Credit Suisse could also help to pave the way for a restructuring of the metal tycoon’s steel operations in the UK. GFG on Monday said it was putting two of its speciality steel plants in Yorkshire, Stocksbridge and Brinsworth, up for sale and would instead focus on its Rotherham operations.

Stocksbridge, which makes high-grade speciality steel and alloys for customers in the aerospace and defence and automotive sectors, was not core to the company’s vision of producing “green steel”, the company said.

Credit Suisse executives involved in the talks over the weekend said the discussions had been encouraging, according to a person briefed on them. They hoped to agree a deal that would allow the steel businesses to continue operating while repaying the bank’s supply-chain finance funds the $1.2bn they are owed by GFG Alliance.

Credit Suisse declined to comment. The bank’s executives had grown increasingly frustrated in recent weeks with Gupta due to his lack of communication with them over his plans to refinance the business. The issues came to a head this month when Gupta appeared to agree to a £200m bailout loan with US-based private equity firm White Oak without informing Credit Suisse.

Those talks were derailed when the Serious Fraud Office announced it was investigating possible fraud at GFG. GFG has denied wrongdoing.