GFG Alliance avoids bankruptcy but is almost withdrawn from France

Sanjeev Gupta, in Dunkirk, in 2019.

To everyone’s surprise, GFG Alliance, the Indo-British steel conglomerate Sanjeev Gupta, seems to have managed to avoid bankruptcy. This nebula of companies has been in turmoil since Greensill, its main creditor, filed for bankruptcy in March, revealing that GFG owed it $ 5 billion.

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Built in seven years by the buyout of factories often considered unprofitable, from Australia to the United States, via the Czech Republic and Poland, the empire of Mr. Gupta, known for its opaque operation, is is found deprived of its main source of liquidity. And since then struggles to survive. However, in a press release, published Sunday, October 10, GFG announced a vital step in its reconstruction: an agreement to restructure its debt in Australia with Greensill and Credit Suisse and the reinjection of 50 million pounds into its British factories. The announcement, which details operations in the rest of the world, contains a hollow confession: there is not a word about France.

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Six months ago, GFG Alliance was nevertheless a major player there, its companies Liberty and Alvance employing more than 2,000 people. Today, there are ten times fewer employees. The takeover by the investment fund American Industrial Partners (AIP) of Aluminum Dunkerque on 1er October, dispossessed it of its last emblematic asset in France. AIP, which had bought back part of the foundry’s debt in the spring, claims that GFG defaulted. What the latter will challenge in court, denouncing a “Cynical and predatory attempt” to acquire the business ” cheap “.

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In August, the German steel group Saarstahl bought the Ascoval steelworks (North) and its main customer France Rail Industry (Moselle) from GFG in an amicable procedure. A sale pushed by Bercy, which had to lend 20 million euros to pay suppliers and salaries.

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GFG also lost control of its automobile foundries in Vienne and Indre. Placed in receivership, two are managed by receivers, and the third, Liberty Poitou, closed in July. Thus, the group of Mr. Gupta keeps in France only the three sites of the bodybuilder Durisotti (250 employees).

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GFG’s announcement of its debt restructuring, which contains a “Substantial payment” Credit Suisse and Greensill’s directors speaks volumes about the extent of its difficulties. Due to lack of cash, the blast furnaces in Rotherham, England, had been shut down for months. The factory will finally be able to restart.

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