The Telegraph reported that Australian mining giant Rio Tinto claims that it has unsettled payments of over USD 50 million from Mr Sanjeev Gupta’s GFG Alliance following the sale of the aluminium smelter in Dunkirk in France to for USD 500 million in 2018 and has launched arbitration proceedings against Mr Gupta in 2019 for the missed payments, which are related to price adjustments that took place after the transaction. GFG’s Alvance Aluminium spokesman said “As is usual practice in sizeable mergers and acquisitions, there is a mechanism in place post-completion of this deal to settle the final consideration to be paid to the vendor net of working capital, accounting and other issues. This system is on going with the vendor as part of the normal process. GFG’s deal to buy the Dunkirk smelter was a successful transaction. The Dunkirk plant is running at full capacity, is delivering to our customers and the outlook for its future remains very positive.” GFG’s purchase of Dunkirk smelter was Mr Gupta’s first major industrial deal financed through traditional bank debt and formed part of a wider spending spree as he snapped up tired steel and aluminium assets around the world. GFG Alliance also bought the Lochaber smelter in Fort William in Scotland in UK from Rio Tinto in 2016, with backing from the Scottish government. The legal wrangling with Rio Tinto is the latest headache for Mr Gupta as he scrambles to arrange new financing following the collapse of the supply chain financier Greensill, which blew a USD 5 billion hole in GFG’s finances. Meanwhile, winding-up orders issued by creditors against three Liberty Steel companies are due to be presented at the High Court next week. The hearings, which have now been delayed, have sparked fears that a failure to deal with them could force Mr Gupta’s empire into liquidation.
The Telegraph reported that Australian mining giant Rio Tinto claims that it has unsettled payments of over USD 50 million from Mr Sanjeev Gupta’s GFG Alliance following the sale of the aluminium smelter in Dunkirk in France to for USD 500 million in 2018 and has launched arbitration proceedings against Mr Gupta in 2019 for the missed payments, which are related to price adjustments that took place after the transaction. GFG’s Alvance Aluminium spokesman said “As is usual practice in sizeable mergers and acquisitions, there is a mechanism in place post-completion of this deal to settle the final consideration to be paid to the vendor net of working capital, accounting and other issues. This system is on going with the vendor as part of the normal process. GFG’s deal to buy the Dunkirk smelter was a successful transaction. The Dunkirk plant is running at full capacity, is delivering to our customers and the outlook for its future remains very positive.” GFG’s purchase of Dunkirk smelter was Mr Gupta’s first major industrial deal financed through traditional bank debt and formed part of a wider spending spree as he snapped up tired steel and aluminium assets around the world. GFG Alliance also bought the Lochaber smelter in Fort William in Scotland in UK from Rio Tinto in 2016, with backing from the Scottish government. The legal wrangling with Rio Tinto is the latest headache for Mr Gupta as he scrambles to arrange new financing following the collapse of the supply chain financier Greensill, which blew a USD 5 billion hole in GFG’s finances. Meanwhile, winding-up orders issued by creditors against three Liberty Steel companies are due to be presented at the High Court next week. The hearings, which have now been delayed, have sparked fears that a failure to deal with them could force Mr Gupta’s empire into liquidation.
