Over the past decade, Sanjeev Gupta has built a reputation as one of the globe’s biggest boosters of steel, sealing a slew of deals for mills and smelters from Romania to Australia – while racking up billions in debt for moribund assets that few others wanted.
The former commodities trader has sketched out a vision of a greener future for steel, with his loose network of companies – GFG Alliance – leading the way. But the near-collapse of his biggest lender, Greensill Capital, has abruptly choked off a key source of funding and is threatening that pace of breakneck expansion.
Prompted by concerns over the impact of the unravelling of Lex Greensill’s trade-finance firm, Spain’s government has asked a division of Gupta’s GFG to prove it’s solvent before the company will be allowed to push ahead with a takeover of an aluminium plant, according to people familiar with the matter. Athene Holding Ltd, which is in talks to buy assets tied to Greensill, has excluded Gupta-linked assets from the deal discussions, Bloomberg News reported on March 4.
There are also signs of stress at a lender owned by Gupta’s alliance, Wyelands Bank. The Bank of England ordered Gupta to inject £75mn into the business to return retail deposits after news of Greensill’s troubles, prompted by concerns about Wyelands’ business model and its links to other Gupta companies, according to a person familiar with the matter. And Greensill’s ties to Gupta have emerged as the focus of a probe at Germany’s financial regulator BaFin.
Gupta’s travails highlight how Greensill’s fall from grace could affect the real world. Greensill’s companies were instrumental in funding the acquisitions that built Gupta’s empire. Finding replacement financing will be critical to his businesses, which employ 35,000 people in 30 countries. Gupta’s operations churned out 5mn tonnes of steel in 2019 and have the capacity to make more than 300,000 tonnes of aluminium per year for auto manufacturers, packaging producers, aerospace clients, and more. A spokesperson for GFG Alliance said its businesses are running as normal and that the company is making progress in lining up new funding.
Though Greensill built his business in an arcane area called supply chain finance, what his company did wasn’t dramatically different from what most banks do: lending. But Greensill’s operation involved a loosely regulated area of finance working with relatively small companies that big lenders are reluctant to lend to. Gupta’s group of companies were beneficiaries of that.
In late February, Gupta was poised to close an agreement to buy Europe’s second biggest aluminium smelter, a massive facility on Spain’s northern coast owned by Alcoa Corp And for much of the past year, Gupta was working on what would have been his most audacious acquisition ever, a takeover of the steelmaking operations of Germany’s Thyssenkrupp AG. But the Thyssenkrupp talks broke down last month as key stakeholders questioned Gupta’s ability to secure funding.
Gupta has faced hard times in the past, an inevitability in the cyclical industries he operates in. One possible bright spot today is rising commodities prices. Since August, steel has almost tripled and aluminium is up more than 20%, driven by a rebound in industrial demand.
Still, turmoil in Gupta’s empire could have a dramatic effect on the customers, communities and countries it serves. Gupta controls companies ranging from industrial behemoths to renewable energy producers, a vast hunting estate in the Scottish Highlands, and a niche bicycle manufacturer.
France was involved in facilitating Gupta’s 2018 acquisition of Europe’s largest aluminium smelter, in the northern city of Dunkerque, from Rio Tinto Plc. And a hydroelectric station and aluminium smelter in Fort William, Scotland, that Gupta bought in 2016 for £330mn is backed by a 25-year-financial guarantee from the Scottish government. The government says it has a “comprehensive security package” on the deal, but declines to disclose details, citing “commercial confidentiality.”

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