Metals magnate Sanjeev Gupta is near securing a £200m mortgage for Liberty Metal UK, which might hand a lifeline to Britain’s third largest metal enterprise and assist stave off hundreds of job losses.
It’s understood that the billionaire has agreed on financing phrases with White Oak International Advisers, which can also be offering contemporary funding for the Australian arm of Gupta’s sprawling holding firm, GFG Alliance.
Liberty Metal’s future has been hanging within the steadiness since its principal lender, Greensill Capital, fell into administration final month, prompting a money crunch for one of many UK’s largest metal producers.
Whereas Gupta tried and did not safe a £170m UK authorities bailout in March, the prospects of latest financing from a personal backer may alleviate fears over Liberty Metal’s personal collapse.
If authorized, the White Oak mortgage would permit Liberty Metal UK to return to full manufacturing, having intermittently paused operations at a few of its vegetation in an try to protect money after Greensill’s failure, an individual with data of the matter mentioned.
GFG Alliance, White Oak and Credit score Suisse declined to remark.
In whole, GFG’s UK operations embrace 11 steelworks vegetation throughout Nice Britain, together with at Stocksbridge and Rotherham in South Yorkshire, in addition to an power firm and an aluminium smelter in Scotland. About 3,000 of GFG’s 5,000 UK workers are employed by its Liberty Metal UK division.
Nonetheless, the White Oak mortgage is known to require approval from Credit score Suisse, which has a declare on Liberty Metal UK by way of loans offered by Greensill Capital. The Swiss financial institution additionally ran multibillion pound funding funds that offered packaged loans to excessive internet value people, by way of a posh system devised by Greensill.
It’s understood that not one of the money will likely be used to assist offset among the £3.6bn that GFG Alliance borrowed from Greensill. Studies prompt that Gupta’s UK metal enterprise alone owes Greensill $769m (£553m).
Greensill’s directors at Grant Thornton are nonetheless working to recoup cash from debtors like Gupta. In the meantime, Credit score Suisse has petitioned to wind up varied Liberty Metal corporations within the UK and Australia in an try to reclaim cash for patrons who invested in Greensill loans that have been packaged up as investments and offered off by way of a sequence of Credit score Suisse funds. These funding funds have been value practically $10bn earlier than they have been closed in March.
Gupta – who’s presently in Dubai – is predicted to be summoned in entrance of UK MPs from the enterprise, power and industrial technique (BEIS) committee this summer time, as a part of a string of inquiries linked to Greensill Capital’s collapse.