White Oak Due Diligence for Australian Business of Liberty Steel
Eminetra reported that when UK’s Serious Fraud Office confirmed on Friday that it was investigating the GFG Alliance, it appeared that San Francisco-
Eminetra reported that when UK’s Serious Fraud Office confirmed on Friday that it was investigating the GFG Alliance, it appeared that San Francisco-based private lenders White Oak Global Advisor, supposed to be a rescuer, had left when it said that it would no longer continue discussions with a company being investigated by the Serious Fraud Office for money laundering, few hours later, it issued a clearly contradictory statement regarding GFG’s Australian operations. A spokesperson said that it is continuing efforts to refinance Liberty Primary Metals of Australia, subject to financial due diligence and acceptable governance. South Australian Treasurer Mr Rob Lucas also said on Sunday that White Oak has made it pretty clear that it has not pulled out of the deal and would continue with due diligence despite confusion late on Friday night when conflicting statements from White Oak emerged.
The reason may be that White Oak Global Advisor is not a fresh white knight but could be trying to manage their existing exposure to metal group. According to documents seen by the Financial Times and those familiar with the matter, White Oak has already undertaken considerable exposure to GFG. White Oak also funded Gupta’s Liberty Group directly.
White Oak was ready to agree on the terms of funding parts of Mr Gupta’s vast industrial empire with an estimated AUD 430 million transaction to refinance the lifelines of Australian and British steelworks.
The relationship between White Oak and GFG dates back to at least February 2019. At that time, the US Group provided AUD 200 million in borrowing facilities for Liberty’s Australian operations. Greensill has invested AUD 545 million with it. According to one person with knowledge of the matter, White Oak subsequently intervened to purchase Liberty Commodity debt from Greensill, for a total of more than USD 200 million. As of early March this year, White Oak had nearly USD 300 million in exposure to Gupta’s Liberty Commodities, which was scheduled to mature on May 20. White Oak has also agreed to lend money to Gupta’s Liberty Commodities and Westford Trade Services, a trading finance company with extensive business.