Banks fear billions in losses on Gupta’s debts
Credit Suisse’s unusual intervention comes after a liquidation petition was filed against GFG’s Liberty Commodities by Citibank, which provides administrative services to the Swiss group.
It is understood that at least two other UK steel companies run by Mr Gupta are also the subject of liquidation petitions, casting doubts on the jobs of 3,000 workers.
Grant Thornton is seeking to recoup losses suffered by Credit Suisse and other creditors after the collapse of Greensill Capital.
The telegraph understands that Mr. Gupta now has a month to strike some sort of deal to stabilize GFG, with the courts not due to hear liquidation motions until May 5.
GFG has been on the verge of collapse since the March 8 administration of Greensill, which provided Mr Gupta with billions of pounds in controversial supply chain finance.
He vowed to keep the steel plants open and offered a “personal guarantee” to the staff on the engagement.
Mr Gupta added that Liberty’s UK factories are a “labor of love” and warned of the dangers of creditors filing claims against his companies in court.
He said: “It doesn’t make sense for them to destroy the jobs of my workers. Maybe the creditors don’t care about this, but they care about the recovery of their stakeholders, and by taking aggressive action they are destroying their own value. “
Sarah Champion, Labor MP for Rotherham, where the Liberty steel plant employs 900 people, said: “There is no doubt that Sanjeev’s personal commitment to the British steel industry. What is more concerning is whether he can get the funding to support his ambition. ”
The government has repeatedly said it will do “everything it can” to support the UK steel industry, despite the refusal last week of a request for a £ 170million emergency loan due to concerns about the structure of GFG.
Boris Johnson sent a signal ministers could step in on Thursday, saying he sees the industry as a “great national asset and the fact that we make steel in this country is of long-term strategic importance.” .
He added: “I am very hopeful that we will get a solution.”