British metal tycoon Sanjeev Gupta’s GFG Alliance has initiated negotiations with Grant Thornton, the administrators of collapsed Greensill Capital, over a “standstill agreement” between the two parties.
It has come followed by the court filings submitted a few days back which unfolds that Greensill’s biggest client, GFG Alliance defaulted on repayments to the boutique financial firm.
As per the industry sources, Gupta’s GFG Alliance could owe up to £3 billion to the lender. The source also came up with a report that Sanjeev Gupta delivered an internal communication to staffs that there were “constructive discussions” between the two sides.
“A formal deal would put on hold arrangements between the two parties and allow both sides more time to assess and negotiate next steps,” the message stated.
“GFG has brought on board PJT Partners, Alvarez & Marsal and Norton Rose Fulbright to help with the negotiations”, Gupta added.
On 8th March 2021, Greensill filed for insolvency and from there onwards, a widespread concern came into effect that it could axe down thousands of jobs at Gupta’s conglomerate, which owns aluminium and steelworks globally.
However, in meetings with trade unions a few days back, Gupta claimed that the firm had “adequate funding” to get through the initial period. But he also said that GFG was scouting to secure alternative means of financing.
He added: “On refinancing, we are enthused by the amount of offers that we have received that reflects the strength of our business. However, given the scale of our operations, this process will take some time to organise.”
“While we bridge to new long term funding arrangements post-Greensill there will be less group support available.”
“We are therefore implementing care plans to make these businesses more financially sustainable by working with management, unions, customers, and suppliers to boost cash flow.”
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