Gupta Tells Business to Preserve Cash as He Seeks Refinancing
Sanjeev Gupta, executive chairman of Liberty House Group, in Sydney, Australia, on May 16, 2018. (Photographer: Brendon Thorne/Bloomberg)

Gupta Tells Business to Preserve Cash as He Seeks Refinancing

Sanjeev Gupta urged his businesses to manage cash carefully as a refinancing for his GFG Alliance would take time after the collapse of its biggest lender, Greensill Capital.

In a letter to colleagues seen by Bloomberg, the man known as the “saviour of steel” said he was “enthused” by the number of offers received so far for refinancing. He also confirmed there are talks for a standstill agreement with Greensill’s administrators, which according to a person familiar with the situation could be concluded as soon as Friday.

“We are asking all of our businesses to take prudent steps to manage their cash positions carefully and reduce their call on group resources while this process takes place,” he said.

In an additional sign of stress, ArcelorMittal SA was set to ask GFG to pay cash up front to supply its plants, according to a person familiar with the situation. It follows a brief suspension of deliveries from the steel giant.

The abrupt collapse of Lex Greensill’s business has shuttered funds run by Credit Suisse Group AG and forced Japan’s SoftBank Group Corp. to write down its $1.5 billion investment in the supply-chain finance firm. Now it risks dragging down GFG, with governments in the U.K., France and Australia among those monitoring the threat to 35,000 jobs.

Gupta’s businesses were Greensill’s biggest customer and GFG told Greensill in February that it would be insolvent without its funding. GFG has hired PJT Partners Inc. and Alvarez & Marsal Inc. to help it secure new financing. Their first task is to secure the $5 billion debt standstill and Gupta said in the letter he hoped to be able to offer an update “soon.”

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