Sanjeev Gupta's Liberty Steel says reached a standstill with Greensill Bank

Sanjeev Gupta’s Liberty Steel said it reached a standstill agreement with Greensill Bank AG, its largest creditor, on debt facilities relating to its European steel businesses.
 

The deal, which is valid until Oct. 31 and could be extended to year-end, will provide breathing room for Gupta’s GFG Alliance as it seeks fresh financing. The German bank, acquired by Greensill Capital before its collapse last year, held much of the $5 billion of loans that Gupta received from the fintech firm.

The agreement marks progress for Gupta as he tries to restructure the debts of his sprawling metals empire. He is still facing an insolvency court proceedings brought by Credit Suisse Group AG, which held his debts through funds that bought notes from Greensill.

“Today’s standstill agreement with Greensill Bank demonstrates we are getting close to a consensual debt restructuring that is in the best interests of all our stakeholders,” a Liberty spokesperson said in an emailed statement.

Bremen-based Greensill Bank was shut down by regulator BaFin in March 2021 after it was unable to find evidence of the assets tied to GFG on its balance sheet. Greensill is now facing a criminal probe in Germany, while the bank itself is in administration.

Gupta has already lost several assets as creditors closed in. The collapse of his biggest financier deprived his businesses of vital working capital, forcing him to sell two steel plants in France. Private equity firm American Industrial Partners also took control of his prized aluminum smelter in Dunkirk after it defaulted on its debts.