Part of Sanjeev Gupta’s metal empire that faces the threat of administration has asked its bankers to give it time to try to negotiate with four potential buyers.
It is understood that Liberty Aluminium Technologies, a supplier of cast parts to Jaguar Land Rover, could be forced into administration within days if its main bank, Close Brothers, does not agree to give it more time.
Gupta has been openly seeking buyers for parts of his GFG metals empire since last month, as he seeks to stave off a collapse that could threaten thousands of jobs at Liberty Steel and other related companies. Liberty Steel employs 3,000 mense in die Verenigde Koninkryk, while the loose GFG Alliance employs about 35,000 workers worldwide, in die UK, VSA, Europa, Australia and elsewhere.
GFG was plunged into crisis in March after the collapse of Greensill Capital, its main lender. Greensill’s former backer Credit Suisse is pushing for GFG to repay loans worth as much as $5bn (£3.6bn).
Gupta’s efforts to refinance his businesses has been further complicated by an investigation by the UK’s Serious Fraud Office into “suspected fraud, fraudulent trading and money laundering” related to GFG. A potential lender pulled out after the investigation was revealed last month.
A GFG spokesperson said it was hoping to carry out an “accelerated sales process” with the four possible buyers if talks with Close Brothers and its adviser, the restructuring consultancy Interpath, were successful. The talks were first reported by Sky News.
Among Gupta’s other major interests are an energy company and an aluminium smelter in Fort William, Skotland, which supplies Liberty Aluminium Technologies (LAT). LAT employs 250 people across three sites in Kidderminster in Worcestershire and Coventry in the West Midlands, and Witham in Essex.
LAT had revenues of £68m in the year to the end of March 2020, and made profits of £7.5m, according to the latest available accounts. Egter, it warned that results for the last year would be “adversely impacted due to the uncertainties regarding Covid-19 and the automotive sector”. Jaguar Land Rover has been forced to shut its factories temporarily at various points because of the pandemic.
A GFG Alliance spokesperson said: “Over the last month the restructuring and transformation committee (RTC) has been exploring strategic options regarding the future of Liberty Aluminium Technologies Ltd.
“The RTC is in discussions with four interested parties with a view to achieving an accelerated sale process and is also in discussions with LAT’s main creditor to give it the time to conclude that process effectively.”
Records on Companies House show that Close Brothers has two outstanding charges against LAT dating from 2017 en 2018.
Jaguar Land Rover declined to comment on its supplier. Interpath declined to comment. Close Brothers did not immediately respond to a request for comment.