By Eric Onstad
LONDON – The GFG Alliance owned by commodities tycoon Sanjeev Gupta said on Monday it was progressing with a major restructuring which will allow it to pay back creditors after its main lender Greensill Capital collapsed in March.
“This in turn will allow GFG to refocus its business, protect jobs and develop further its remaining assets,” it said in a statement.
GFG has been under pressure to find refinancing for its cash-starved web of businesses in steel, aluminium and energy after supply chain finance firm Greensill filed for insolvency.
Gupta’s business said on Monday it had agreed a framework with Greensill Bank’s administrators for “positive direct engagement to achieve an amicable resolution”, giving no further details.
Monday’s announcement comes after GFG and Credit Suisse said last week they had reached a standstill agreement on Australian steel and coal mining assets, which will allow the full refinancing of that business.
The Zurich-based bank had previously disclosed some $2.3 billion worth of loans exposed to financial and litigation uncertainties within the funds, with some $1.2 billion of its assets related to GFG Alliance.
“The developments help pave the way for a refinancing which will enable GFG to pay back creditors,” GFG said on Monday.
GFG also said on Monday it had released refinancing documents for its steel operations in continental Europe, including Romania and the Czech Republic.
It was also continuing the sales process for its UK aerospace and special alloys business and would merge its steel operations in Belgium, Luxembourg and Italy into the Romanian business.
GFG has been under a cloud since the UK launched an investigation into suspected fraud and money laundering in mid-May.