Sanjeev Gupta faces battle over management of Belgian metal crops

Sanjeev Gupta faces a battle to retain management of his Belgian metal operations forward of a court docket resolution this week on their future possession, because the under-fire industrialist makes an attempt to prop up his GFG Alliance group.

A court docket within the Belgian metropolis of Liège will on Tuesday rule on whether or not to take management of GFG’s two websites, at Flémalle and Tilleur, and put them up on the market following a request by a court-appointed judicial observer.

The observer, who was appointed in Might to help the administration of the 2 crops, made the request in gentle of their deteriorating financial situations, a spokesperson for the Liège Industrial Courtroom confirmed on Friday.

Granting of the request will, in impact, enable the sale of the property of the corporate if it comes beneath the management of the court docket, the spokesperson added. The judicial observer declined to remark.

The listening to is the newest problem going through Gupta, who has been battling to refinance GFG ever for the reason that collapse of its major lender, Greensill Capital, in March final yr, amid allegations of fraud. The UK’s Severe Fraud Workplace and French police are investigating GFG Alliance firms over suspected fraud and cash laundering. GFG has constantly denied any wrongdoing.

Gupta final yr misplaced management of a Belgian aluminium mill to personal fairness group American Industrial Companions. AIP had already taken over Europe’s largest aluminium smelter in Dunkirk, France, from the industrialist.

The 2 Belgian metal crops, which collectively make use of about 650 folks, function beneath GFG’s metal arm, Liberty Metal Group. GFG acquired the websites and a facility in Dudelange, Luxembourg, from ArcelorMittal in 2018.

Gupta in Might efficiently appealed in opposition to a choice that known as for the Belgian enterprise to be liquidated after a choose rejected a restructuring plan.

The choice was overturned after Gupta’s Romanian metal subsidiary, Liberty Galati, offered monetary help for its Belgian counterpart within the type of a debt-to-equity swap price €52.5mn in addition to €3mn in money, in accordance with court docket information filed on the time.

Since then, nonetheless, hovering power costs in Europe within the wake of the battle in Ukraine, coupled with falling buyer demand, have severely affected the operations on the two crops.

Liberty Metal Group instructed the Monetary Instances that the request for the court docket in Liège to “open reorganisation proceedings geared toward a switch of Liberty Liege’s enterprise . . . runs counter to the numerous efforts made” by the corporate in collaboration with the regional Walloon authorities to “determine a sustainable future” for the crops.

The corporate, it added, had continued to pay workers and different collectors whereas operations had been idled to minimise power consumption and publicity to commodity costs.

Liberty “might think about acceptable authorized motion as soon as the court docket has made its resolution”, the corporate added.