Wed. Oct 20th, 2021

On the sidelines of the English cricket team’s tour of 2017-18 in Australia, MPs from the two countries outside Sydney competed for the final match in the parallel “Parliamentary Ashes” series.

Among spectators, including then-Prime Minister Malcolm Turnbull, and his predecessor, John Howard, was British metal magnate Sanjeev Gupta, the sponsor of the British politicians’ tour that had bought the Whyalla steel plant in South Australia four months earlier.

In the bright summer sun, a red Englishman, Jay Hambro, also watches the origins of a London-based banking dynasty whose deep-seated connections have helped drive Gupta’s relentless deal and open doors for politicians and borrowers.

Now a breakup threatens their relationship as Gupta struggles to keep its GFG alliance afloat following the collapse of its main lender Greensill Capital this year. After a disagreement over an asset sale, the 45-year-old Hambro will leave GFG, which is being investigated by the UK’s Serious Fraud Office.

Hambro, tall, broad-shouldered and physically imposing, helped Gupta gain access to global banks for the first time, and brought credibility to the Indian-born businessman’s efforts to become an international force in the metal industry.

“I can understand why Sanjeev wanted him by his side — he was extremely influential — nothing happened within GFG without his resignation,” said a banker who worked with GFG. “I don’t think he would have gotten where he was without Jay next to him.”

For one of Gupta’s biggest deals, the 2018 acquisition of Rio Tinto’s aluminum smelter in Dunkirk, Hambro helped secure a $ 350 million loan from a consortium of banks, including Morgan Stanley and China’s ICBC – the first time GFG has obtained traditional bank loans.

He delivered a ‘wow PowerPoint speech’ according to a banker about the deal, which Hambro described as ‘the ultimate salesman’, after ‘promising many things to many banks’.

With a family legacy that extends to Baron Carl Joachim Hambro, a Dane who founded Hambros Bank in London in 1839, he grew up in the narrow world of finance and mining.

At the age of 17, the Harrow-trained Hambro is packed by his father Peter for a period at mines in Australia with his brother Evy. After a business management degree at Newcastle University, he takes a job in natural resource banking at Rothschilds and HSBC Petropavlovsk, the gold – focused gold miner founded by his father.

The Pokrovskiy gold mine, owned by Petropavlovsk, in the Amur region in the Far East © Igor Ageyenko / AFP

He was later given the task of managing Petropavlovsk’s iron ore deposits in the Far East, which was listed in the IRB in 2010, as HUBRO as a young executive chairman, and he had to deal with a much older board, including Simon Murray, then chairman of Glencore.

“He really does his homework and has an incredible ability to listen and learn — he’s a very impressive individual,” said Johnny Martin Smith, an independent non-executive director of IRC. “If Simon said something that was not fair, he would say it to him, as chairman of Glencore or not.”

Petropavlovsk sponsored a $ 340 million loan to the company of the largest bank, ICBC, for the construction of an iron ore mine. In e-mails, IRC was described as a member of the “Petropavlovsk Alliance”.

“It was a family affair,” said one banker.

However, people who know Hambro say he wanted to get out of his father’s shadow. In 2016, Gupta offered him a way out of the family business.

Hambro becomes investment head of the group for GFG, with responsibility for the acquisition of Wyelands Bank of that year as well as the company’s energy portfolio.

At its peak, Wyelands raised more than £ 700 million in deposits from UK savers, which were mainly lent to companies with a link to GFG. Wyelands is being investigated by the National Crime Agency and Serious Fraud Office and Hambro has left the council, according to the documents.

Hambro’s idea was to build renewable energy supply for the company’s steel plants and other industrial assets, which would reduce power costs but also help reduce operations. In the longer term, he hoped to create a portfolio of mining assets for the business.

Jay Hambro and Sanjeev Gupta traveled all over the world to make transactions © Drahoslav Ramik / CTK Photo / Alamy

He soon became the right-hand man of Gupta and traveled the world to do transactions from Australia to Europe and the USA. According to a person who knows him, Hambro is an arch-networker and likes to do transactions.

In Scotland, Hambro Gupta helped gain political support, including through Prime Minister Nicola Sturgeon. The government register of ministerial commitments shows Rural Economy Minister Fergus Ewing from September 2017 to May 2018 four times in six months with Hambro.

GFG’s acquisition of Britain’s last aluminum smelter in Lochaber, along with two nearby hydropower plants acquired from Rio Tinto in 2016, has retained jobs and saved significant industrial assets. The purchase was supported by a government guarantee worth £ 575 million.

In 2018, Macquarie decided to stop doing business with the business, according to people familiar with the matter, due to concerns about how it will be financed. Macquarie declined to comment.

Hambro has succeeded in taking over JPMorgan as a corporate broker for Simec Atlantis, a tidal power company whose acquisition by Gupta he handled. The Wall Street bank also helped arrange a mortgage sale for Gupta’s Australian subsidiary Infrabuild, which raised $ 325 million at a 12 percent return. JPMorgan declined to comment.

Other energy transactions handled by Hambro include the 2017 take over of Scottish hydropower developer Green Highland Renewables.

However, the renewable projects struggled. Shares in Simec Atlantis, where Hambro sits on the board, have fallen 86% over the past five years.

While GFG is struggling to survive, the reputation of both Gupta and his former right-hand man is at stake.

One former government minister said Hambro seemed ‘extremely pleased with himself and a perfect name-dropper’, adding that, given the possible outcome of Gupta’s disputes, ‘I suspect he is not so smart than he does not think ‘.

Reporting by Henry Sanderson, Robert Smith, Michael Pooler, Neil Hume and Sylvia Pfeifer

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