Tue. Oct 19th, 2021

While revelers enjoyed the dying days of summer on the Greek resort island of Mykonos this past weekend, a distinctive blue and silver helicopter blew over their heads.

Passengers on the private plane sit comfortably in his white leather seats as they approach their destination: Sanjeev Gupta’s exuberant 50th birthday celebration. While few of the spectators relaxing at the luxury hotels below the luxury hotels probably recognized the corporate logo on the tail, the call sign under the helicopter’s rotor blades – ‘M-INES’ – gave an idea of ​​the heavy industry what the owner’s fortune.

Thousands of steel workers employed by Gupta’s businesses around the world face an uncertain future following the collapse of its principal lender Greensill Capital. But while the metal magnet has not stepped on British soil since the Serious Fraud Office launched an investigation in businesses in his Gupta Family Group Alliance, he still lives high and enjoys frequent trips to Europe from his new home base in Dubai.

But some members of his circle wonder privately how long can the party last.

GFG Alliance has more than $ 5 billion in outstanding debt, the majority of Greensill, which must now be refinanced. A guilty creditor has opened a number of lawsuits in the UK and on Friday said he had taken control of Gupta’s valued aluminum smelter in France. Rising prices of key products that came to GFG’s rescue earlier this year are cooling off.

Still, people involved in the recent negotiations with Gupta say he looks fearless, channeling the chutzpah that helped him put together a collection of non-beloved metal plants and a extensive conglomerate with 35,000 employees.

“He’s really overconfident at the moment,” said one person involved in the refinancing talks, adding that he was winning the pledge of financing through the power source for trade in goods. Glencore earlier this year, his morale particularly lifted. “Stubborn is probably the right word.”

Sun, sand and steel

Gupta, who turned 50 on Monday, invited a group of good friends, key lieutenants and business partners to a multi-day celebration in Mykonos.

A helicopter transported guests to and from the festivals on Mykonos

The itinerary includes festivals at upscale beach bars and five-star resorts, according to people familiar with the occasion, as well as a day trip to the uninhabited island of Rineia in the area. Gupta’s helicopter transported guests to and from the festivities.

“The parents of Sanjeev Gupta received family and a small number of friends and business partners to celebrate their son’s 50th birthday. [last] month in Mykonos, ”said GFG. ‘The event was sponsored by Sanjeev’s father to be an important milestone.

Meanwhile, workers at Gupta’s Liberty Steel plants in Yorkshire are increasingly frustrated by the lack of progress with new financing. Most employees at its two main plants, in Rotherham and Stocksbridge, have been busy in recent months, disrupting production due to financing problems. Liberty Steel is the third largest steelmaker in Britain and employs around 3,000 people across the country.

Hope is now tied to a breakthrough by the middle of the month. The company recently told employees in a personnel file that “activities to begin rebuilding in mid-October are still ongoing”. Under an agreement with unions, GFG promised to pay 80% of their salaries for the month for idle workers.

“It is clear that we need to implement a financial solution,” said a spokesman for the steelworkers’ union Community. “We hold Sanjeev Gupta accountable for his promises to protect our jobs and the future of our businesses.

GFG has told UK employees that an agreement to refinance the group’s Australian business will pave the way for new funding in the UK. While Gupta said last month that the deal to refinance Greensill’s debt related to steelworks and mines in Australia was “virtually finalized”, negotiations with potential chief lender White Oak Global Advisors have since been hampered by a recent drop in the price of iron ore.

One person familiar with the position of GFG emphasized that the company has other options to finance the business and is still concluding a refinancing transaction in Australia. They added that an agreement to finance the British venture was scheduled for mid-October.

Credit rating agency Moody’s downgraded InfraBuild – GFG’s Australian steel recycling company – deeper into the rubble on Tuesday, citing the ‘increasing refinancing risk’.

Workers at Gupta’s Liberty Steel plants in Yorkshire are increasingly frustrated by the lack of progress with new funding © Chris Ratcliffe / Bloomberg

The delays also test the patience of Credit Suisse, whose customers owe about $ 1.2 billion to GFG, after the Swiss bank invested their money in complex products arranged by Greensill, which exposed them to GFG.

Missing in action

While a group of trusted advisers undertook the pilgrimage to Mykonos, several key figures were conspicuous by their absence.

While Glencore recently provided financial support for Gupta’s aluminum business, none of its dealers attended the event, according to people familiar with the details.

Also was absent Jay Hambro, the origins of a London-based banking dynasty that until recently served as Gupta’s chief investment officer and right-hand man, before a rift arose between the two.

Both Glencore and Hambro are in a battle for control of key parts of Gupta’s aluminum business with American private equity firm American Industrial Partners.

AIP earlier this year set its sights on GFG plants in France and Belgium and took on debt against the businesses of original lenders, including BlackRock and Barclays.

Hambro entered into an agreement to sell the assets to AIP, which would cause him to jump to the new owner. tension with Gupta. Glencore then came up with an offer to offer a loan that would enable Gupta to retain control of the aluminum business, while Glencore offered access to the metal to sell through its large trading business.

Jay Hambro, who until recently served as Gupta’s chief investment officer, was absent from the celebrations © Anna Gordon / FT

AIP responded by taking legal action against two British holding companies owned by the French and Belgian aluminum companies administration in July. He filed a new lawsuit with the London High Court last month alleging that the French company AIP immediately repaid more than $ 145 million in debt as a result of the administration of its British parent company.

AIP declined to comment.

Although Gupta had not visited his factories in the UK for some time, he was back at some of his European businesses, including GFG’s large steelworks in Romania, because the Covid restrictions were eased.

‘I’m not a council chairman who sits and never sees his plants. I like to go to my plants and go there regularly, ”Gupta said in an internal podcast in August. “There are no red carpets, this is a normal activity for me.”

Additional reporting by Neil Hume and Owen Walker

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