GFG Alliance Stops Payments to Greensill Capital
Financial Times reported that Mr Sanjeev Gupta’s GFG Alliance has stopped making payments to Greensill Capital, the ailing finance group that helped
Financial Times reported that Mr Sanjeev Gupta’s GFG Alliance has stopped making payments to Greensill Capital, the ailing finance group that helped transform the former commodities trader into a leading player in the global steel industry, according to people briefed on the move. FT report quoted a source as saying that “The industrialist told senior colleagues on Thursday that he was not intending to make payments on financing facilities from Greensill and that one due on Monday had not been made.”
FT report added “The turmoil at Greensill has triggered a wave of concern among GFG’s suppliers, local politicians and unions over its prospects. Some suppliers to Liberty Steel, GFG’s main metals business, said they were examining their exposure to the group. One said they had tightened their terms of trading and were asking for payment sooner. A second said they were considering asking for cash payments upfront.”
The move marks a stunning rupture between Mr Gupta’s GFG and Greensill, businesses whose close links have drawn the scrutiny of regulators. It comes as Greensill prepares to file for insolvency in the UK.
Founded by former banker Mr Lex Greensill, the eponymous group was plunged into crisis this week after its main insurer refused to renew a USD 4.6 billion contract and Credit Suisse froze USD 10 billion of funds linked to the company. Private equity firm Apollo remains in talks to buy parts of the business.