Spain Asks Gupta to Prove GFG Unit Is Solvent to Take Over Plant

Spain’s government has asked the aluminum division of Sanjeev Gupta’s GFG Alliance to prove it’s solvent to push ahead with a takeover of an aluminum plant in the country, according to people familiar with the matter.

GFG’s Alvance was on track in late February to close an agreement to acquire a plant owned by Alcoa Corp., according to people familiar with the matter. But the potential implications GFG faces from this week’s unraveling of trade finance company Greensill Capital prompted the Spanish government to request Alvance show evidence of its solvency to proceed with the deal, two of the people said.

A spokesperson for GFG declined to comment on the Spanish deal and reiterated company comments from earlier this week that its businesses were running as normal and it was making progress in discussions with financial institutions to diversify funding.

GFG Alliance has been rocked by the demise of Greensill Capital, the firm that allowed his firms to borrow billions of dollars. The suspension of the Credit Suisse Group AG’s funds that invested in Greensill-sourced loans, as well as the BaFin probe into Greensill Bank, has suddenly blocked a key source of funding for companies owned by Gupta.

Spain’s Ministry of Industry and SEPI, a government holding company with long-term stakes in Spanish companies, are acting as a bridge between Alcoa and Alvance to avoid the closure of the plant after the bilateral talks between the two companies fell apart last year.

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