Gupta’s GFG Alliance Asks U.K. for $235 Million Bailout
(Bloomberg) -- Sanjeev Gupta’s GFG Alliance has written to the U.K. government requesting emergency financing as it tries to stay afloat following the collapse of its biggest lender.
GFG has requested as much as 170 million pounds ($235 million) from taxpayers, according to a person familiar with the matter. No decision on new financing has been made, and government support for Liberty is unlikely to come before any insolvency, according to the person.
Gupta owns a dozen steel mills in the U.K. under his Liberty Steel division, more than in any other country. Some of his plants provide products that cannot be sourced elsewhere in Britain, raising the stakes for local manufacturers who depend on them. Business Secretary Kwasi Kwarteng said on Thursday that the government was looking at all options to keep the mills open, describing Liberty as a “vital piece of infrastructure.”
The request was first reported by Sky News.
A spokesperson for the U.K. government said it was “closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader U.K. steel industry and trade unions.” A spokesperson for GFG declined to comment.
The future of Gupta’s businesses have been cast into doubt after the collapse of Greensill Capital, which provided $5 billion of credit facilities to GFG. The magnate is seeking to negotiate a payment standstill agreement with the lender and restructure its finances. York Capital Management and White Oak Global Advisors held preliminary discussions to provide new loans, Bloomberg reported last week.
It comes at a time when GFG’s businesses should be booming thanks to incredibly high steel prices. The former commodities trader has instructed his businesses to manage their cash carefully. Gupta also faces pressure from some suppliers, like ArcelorMittal SA, which have moved to a policy of requesting cash upfront from his mills.
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