INDIAN-BRITISH billionaire Sanjeev Gupta-owned steelmaker GFG Alliance on Monday (15) said it will pause some UK activities to preserve cash following the collapse of corporate finance firm Greensill.
Gupta’s sprawling steel empire, which had been Greensill’s biggest customer, has 35,000 staff worldwide, including 5,000 in Britain where its Liberty Steel division is based.
“Some UK businesses will be operating intermittently, which can and will be achieved without compromising the condition of the plants,” GFG Alliance said in a statement.
The group added that it is “working closely” with trades unions and is making use of the UK government’s furlough scheme, which is paying the bulk of wages for millions of private-sector workers during the coronavirus pandemic.
Greensill specialised in short-term corporate loans via a complex and opaque business model that ultimately sparked its declaration of insolvency one week ago.
The finance firm crashed last Monday (8) into administration, or the process whereby outside expertise is called upon to minimise job losses, amid mounting doubts over its assets.
Reports said that Gupta owed around £4 billion to Greensill and some of the world’s biggest lenders.
His acquisition spree in the past had been fuelled by Greensill’s supply chain finance funds, enabling him to buy up steel and aluminium factories from Scotland to Australia.
That included providing more than £1.9 billion of funds for him to buy a clutch of European steelworks from Arcelor in 2019, reports added.
GFG also operates three large sites in France, comprising Ascoval steelworks, Hayange rail plant and an aluminium facility in Dunkirk.