STEEL magnate Sanjeev Gupta’s GFG Alliance have reached a standstill agreement with Credit Suisse over its Australian steel and coal mining businesses.
The six-week deal will give the conglomerate the time to fully refinance operations at the Liberty Primary Metals Australia, GFG said in a statement today (23).
“GFG Alliance and Credit Suisse Asset Management (CSAM) have agreed a formal standstill agreement with regard to Liberty Primary Metals Australia (LPMA),” GFG said in a statement.
Gupta has been struggling to preserve his commodities and energy empire since March after the collapse of his major financial backer, Greensill Capital.
The standstill agreement covers LPMA’s Whyalla steelworks in south-west Australia, and its coking coal mine at Tahmoor, GFG said.
The group had agreed to sell off a number of sites, including its speciality steelworks in Stocksbridge in the midlands, to pay off its lenders.
The firm also said work was working to resolve the company's remaining exposure with Credit Suisse.
Credit Suisse earlier disclosed some $2.3billion (£1.6bn) worth of loans exposed to financial and litigation uncertainties, with some $1.2bn (£859 million) of its assets related to GFG.
Separately, Anton Krull, chief financial officer (CFO) at Liberty Steel UK, an arm of GFG Alliance, professed ignorance about the exact state of the company’s finances during questioning by MPs.
Krull told MPs on the business, energy and industrial strategy select committee on Tuesday (22), that despite being CFO, his remit “does not extend to the balance sheet in terms of the capital structure”.
Richard Fuller, a Tory MP on the committee, said, “It is totally unacceptable when so many issues around the viability of the business relate to financial matters at GFG that they sent people who were patently incapable, for good reasons, of answering even the most basic questions.”
Concerns have mounted about the fate of Liberty Steel’s British plants after the collapse of Greensill. The company is one of the leading steel producers in the UK, employing about 3,000 people across the country.
GFG also faces an investigation into suspected fraud, fraudulent trading and money laundering by the Serious Fraud Office.
