Gupta Clashes With Aide Over Tussle for GFG Aluminum Unit

Sanjeev Gupta has fallen out with one of his top aides over the sale of his company’s aluminum assets, according to people familiar with the discussions.

The clash with Jay Hambro, chief investment officer at Gupta’s GFG Alliance, has reopened the competition for the group’s aluminum unit, which includes Europe’s largest aluminum smelter at Dunkirk, France, the people said.

Hambro has angered Gupta by backing a bid from U.S. private equity group American Industrial Partners. Now Gupta is considering proposals from several others, including commodity traders Glencore Plc and Trafigura Group, the people said, noting that AIP could yet secure the deal if it improves its offer.

The competition for Gupta’s aluminum unit, which could be worth close to $1 billion including debt, highlights the changing fortunes of the businessman. He has been fending off creditors since the collapse of his main lender Greensill Capital in March, and is facing a U.K. investigation into suspected fraud and money laundering. Still, soaring steel and aluminum prices have made many of his assets attractive to potential buyers.

A spokesman for GFG Alliance said in response to questions that the group was focused on the refinancing of its business, and that its mergers and acquisitions team “have led many acquisitions for GFG and have always acted with utmost integrity and professionalism.”

Hambro, who remains in his role, couldn’t immediately be reached for comment. AIP didn’t respond to an emailed request for comment.

Relationship Soured

Hambro, a scion of the British banking family, joined Gupta’s group in 2016 and has been one of his closest and most senior aides. However, the relationship between the two men soured after Hambro became involved with AIP’s bid for the aluminum assets, the people said.

In April, AIP bought most of the senior debt on Gupta’s two main aluminum assets, the Dunkirk smelter and the Duffel rolling mill in Belgium, putting it in position to buy them. Under AIP’s proposal, Hambro would have left GFG when the assets were sold and taken a job as a top executive of the newly-separate aluminum group, the people said.

Gupta, disappointed by Hambro’s willingness to desert him as well as the relatively low price offered by AIP, is now considering rival proposals. Glencore has offered a prepayment for aluminum that would help Gupta to repay senior creditors of the Dunkirk smelter, while Trafigura -- which also holds a portion of the roughly $250 million in senior debt -- has also indicated its interest in the smelter.

Spokespeople for Glencore and Trafigura declined to comment. Details of the refinancing talks with Glencore were first reported by the Financial Times.

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