Sanjeev Gupta’s French, Belgian Units Seek Creditor Protection
(Bloomberg) -- GFG Alliance’s steel units in France and Belgium started creditor protection procedures, adding to the list of businesses owned by Sanjeev Gupta seeking court help to see them through the collapse of Greensill Capital, his largest lender.
GFG’s Ascoval plant and a unit in Hayange filed for conciliation in France, a pre-insolvency procedure that allows company directors to retain control of the business while seeking a restructuring deal with creditors, according to people familiar with the matter.
The firm running steel plants in Liege, Belgium under the Liberty Steel banner filed for a similar process under local rules and requested the appointment of a so-called mediator, separate people familiar said.
Three of the group’s aluminum businesses in France were put into voluntary administration on Thursday after facing structural changes in their markets and a reduction in working capital support available from GFG Alliance following the collapse of Greensill.
Gupta’s GFG Alliance, a loose group of metals and commodity trading companies, warned in February it would face insolvency without Greensill’s funding, according to court documents. Gupta has been seeking alternative financing since the lender collapsed in March.
Gupta sought but failed to win support from the U.K. government, where much of his business is based, rejecting a request from GFG for a 170 million-pound ($234 million) bailout. Business Secretary Kwasi Kwarteng said it would have been “very irresponsible” to provide the funding given the opaque nature of the business. The French government last month said it would provide a 20 million-euro ($24 million) loan to GFG’s steel sites in the country.
Credit Suisse Group AG, a large buyer of GFG loans sourced and packaged by Greensill, is seeking to push into insolvency some of the businesses in the U.K. and Australia.
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