GFG Alliance

Last updated
GFG Alliance
IndustryMining, energy, materials
Revenue$20 billion (2020) [1]
OwnersVarious members of the Gupta family
Number of employees
Over 35,000 (2019)
Subsidiaries
Website www.gfgalliance.com

Gupta Family Group Alliance (GFG Alliance) is an international group of businesses associated with businessman Sanjeev Gupta and the British Gupta family. [2] [3] Collectively, companies in the alliance are involved in mining, industry and trading.

Contents

History

In March 2021, GFG Alliance was struggling to secure new financing after the collapse of one of its lenders, Greensill Capital. [4] GFG was put under brief observation by the German financial regulator BaFin for their business with Greensill. [5]

On 31 March Credit Suisse began insolvency proceedings against Liberty Commodities Limited, a GFG subsidiary, at a London court. The action was brought by another bank, Citigroup, which was acting under instruction from Credit Suisse. It related to Credit Suisse's supply-chain investment funds, worth nearly $10 billion, whose funds were party invested through Greensill Capital, which had placed $3.6 billion in GFG, part of which had funnelled down to LCL. It was expected for the balance sheet of Credit Suisse to absorb significant damage as a result. [6] The bank also launched insolvency proceedings against other entities affiliated with GFG. [7] According to The Wall Street Journal , Credit Suisse would face difficulties in recouping the funds, as Greensill had split up loans backing the funds' investments (including loans granted to GFG Alliance) into a double trust structure. [8]

On 3 April 2021, it came to light that the Jahama Highland Estates (formerly the "Alcan Estate") had been purchased in 2016 as part of the Rio Tinto Mines deal for the Lochaber aluminium plant, because the furnace requires so much power that the smelter is located near a hydroelectric plant, which drains the basin of the 114,000 acre Estate. Alcan designed all their smelters that way. The Estate includes the north face of Ben Nevis. According to reports, the Scottish National Party mandated that the Estate never be split from the hydro plant and aluminium smelter but Gupta ignored them and placed ownership of the Estate in a company that is domiciled on the Isle of Man. The 2016 deal was worth £330 million and was guaranteed by the UK Chancellor of the Exchequer. Conservative finance spokesperson Murdo Fraser was critical about the alleged breach of the SNP agreement and urged the SNP to "take whatever steps are necessary to protect public funds". [9]

In May 2021 investors began to pay more attention to the sale of GFG Alliance's French steel plants Ascoval and Hayange causing GFG Alliance to hire Rothschild to run an accelerated M&A process of the two assets. [10]

Structure

The GFG Alliance includes: [11]

Miscellaneous divisions

Lobbying

GFG Alliance's interests are represented to the South Australian parliament by lobbying firm, Bespoke Approach. [13]

Related Research Articles

Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.

<span class="mw-page-title-main">Fort William, Scotland</span> Town in the Highlands of Scotland

Fort William is a town in Lochaber in the Scottish Highlands, located on the eastern shore of Loch Linnhe. At the 2011 census, Fort William had a population of 10,459, making it the second largest settlement in both the Highland council area, and the whole of the Scottish Highlands; only the city of Inverness has a larger population.

<span class="mw-page-title-main">Economy of Iceland</span>

The economy of Iceland is small and subject to high volatility. In 2011, gross domestic product was US$12 billion, but by 2018 it had increased to a nominal GDP of US$27 billion. With a population of 387,000, this is $55,000 per capita, based on purchasing power parity (PPP) estimates. The 2008–2011 Icelandic financial crisis produced a decline in GDP and employment that has since been reversed entirely by a recovery aided by a tourism boom starting in 2010. Tourism accounted for more than 10% of Iceland's GDP in 2017. After a period of robust growth, Iceland's economy is slowing down according to an economic outlook for the years 2018–2020 published by Arion Research in April 2018.

<span class="mw-page-title-main">Credit Suisse</span> Swiss multinational bank

Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and provides services in investment banking, private banking, asset management, and shared services. It is known for strict bank–client confidentiality and banking secrecy. The Financial Stability Board considers it to be a global systemically important bank. Credit Suisse is also a primary dealer and Forex counterparty of the Federal Reserve in the United States.

<span class="mw-page-title-main">Savings and loan crisis</span> US financial crisis from 1986 to 1995

The savings and loan crisis of the 1980s and 1990s was the failure of 32% of savings and loan associations (S&Ls) in the United States from 1986 to 1995. An S&L or "thrift" is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members.

Arrium was an Australian mining and materials company, employing nearly 10,000 workers, that went into voluntary administration in 2016 with debts of more than $2 billion. In 2017 it was acquired by British-owned Liberty House Group.

<span class="mw-page-title-main">Kurri Kurri aluminium smelter</span> Aluminium smelter in Kurri Kurri, Australia

The Kurri Kurri aluminium smelter was located in Kurri Kurri, Australia and operated from 1969 until 2012. Developed by Alcan Australia Limited, the smelter experienced a change of ownership three times during its operations. Through gradual expansion, the smelter increased its production capacity from 30,000 tonnes per year (t/y) to 180,000 t/y of aluminium metal by the 1990s. The Kurri Kurri Smelter was engaged in operations in four areas; potlines for the melting of alumina, a cast house for casting of molten metal, a carbon plant for baking anodes, and anode plants for the manufacturing of carbon anodes.

<span class="mw-page-title-main">Apollo Global Management</span> American private equity company

Apollo Global Management, Inc. is an American private equity firm. It provides investment management and invests in credit, private equity, and real assets. As of 2022, the company had $548 billion of assets under management, including $392 billion invested in credit, including mezzanine capital, hedge funds, non-performing loans, and collateralized loan obligations, $99 billion invested in private equity, and $46.2 billion invested in real assets, which includes real estate and infrastructure. The company invests money on behalf of pension funds, financial endowments, and sovereign wealth funds, as well as other institutional and individual investors. Funds managed by Apollo have produced a 24% internal rate of return (IRR) to investors, net of fees.

Jay Hambro is a British businessman in the mining, energy, steel and commodity sectors. He is the founder of Verdigris Strategic, a long-term investor and business transformation specialist.

The Lochaber hydroelectric scheme is a hydroelectric power generation project constructed in the Lochaber area of the western Scottish Highlands after the First World War. Like its predecessor at Kinlochleven, it was intended to provide electricity for aluminium production, this time at Fort William, a little further north. It is still in operation.

<span class="mw-page-title-main">Liberty Steel Group</span> British industrial and metals company

Liberty Steel Group Holdings UK Ltd (LSG), which is also referred to as Liberty House or Liberty House UK, is a British industrial and metals company founded in the United Kingdom in 1992 by industrialist Sanjeev Gupta. It is headquartered in London, England, and has offices in Dubai, Singapore and Hong Kong.

Sanjeev Gupta is an Indian-born British businessman, and the founder of Liberty House Group. He is the CEO and chairman of GFG Alliance, an international conglomerate that operates primarily in the steel and mining industries. Following the collapse of Greensill Capital in 2021, Sanjeev Gupta has been under scrutiny for his ties to the failed company, which involved opaque financing and sales invoices that Greensill's administrator has been unable to verify.

<span class="mw-page-title-main">Greybull Capital</span> British private investment company

Greybull Capital LLP is a private investment company that specialises in medium- to long-term investments in UK-based companies. It was incorporated as a limited liability partnership in April 2010. In the aftermath of the financial crisis of 2007–2008, Greybull's strategy was to buy distressed firms and return them to success.

<span class="mw-page-title-main">Clydebridge Steelworks</span>

The Clydebridge Steelworks, also known as Clydebridge Works, is a steel works in South Lanarkshire, Scotland.

SIMEC Group Ltd is a British international energy and natural resources business focused on resources, sustainable power, infrastructure, and commodities trading. In 2016 it had an annual turnover of almost USD2.5 billion and net assets of USD350 million. It is part of the Gupta Family Group ("GFG") Alliance, owned by members of the Gupta family, which had a combined turnover of more than USD13 billion and combined net assets of more than USD2.3 billion. Its activities span renewable energy generation, mining, shipping, and commodities trading.

<span class="mw-page-title-main">Urs Rohner</span> Swiss lawyer, businessman and banker (born December 1, 1959)

Urs Rohner is a Swiss lawyer, businessman and banker. He is the former CEO of ProSiebenSat.1 Media and former chairman of Swiss bank Credit Suisse. After his 10 year tenure the share price lost 75% of its value leaving the bank engulfed in various scandals and subsequently apologizing for his poor performance at the last shareholder meeting. He is considered one of the worst chairmen in Swiss banking.

Reid Collins & Tsai LLP is a national trial law firm with offices in New York, Austin, Dallas, Wilmington, and Washington, D.C. The firm represents plaintiffs in complex commercial litigation on a mixed-fee or contingency-fee basis.

<span class="mw-page-title-main">Greensill Capital</span> Financial services company

Greensill Capital was a financial services company based in the United Kingdom and Australia. It focused on the provision of supply chain financing and related services. The company was founded in 2011 by Lex Greensill. It filed for insolvency protection on 8 March 2021.

Alexander David "Lex" Greensill is an Australian businessman best known for being the founder of Greensill Capital, a company focused on supply chain finance and derivative financial products that on 8 March 2021 filed for insolvency protection and faced legal scrutiny.

Archegos Capital Management was a limited partnership family office that managed the personal assets of Bill Hwang, at one time managing over $36 billion in assets. On April 27, 2022, Hwang was indicted and arrested on federal charges of fraud and racketeering.

References

  1. ↑ "Champions of Sustainable Industry" (PDF). GFG Alliance. Retrieved 31 May 2021.
  2. ↑ Stress Reliever- Business News
  3. ↑ Sanjeev | GFG Alliance
  4. ↑ Pickard, Jim (2021-03-19). "UK draws up plans to run Liberty Steel if Gupta's GFG collapses". Financial Times. Retrieved 2021-04-02.
  5. ↑ "Greensill Woes Deepen as Germany Shutters Bank Unit". Bloomberg.com. 2021-03-03. Retrieved 2021-04-02.
  6. ↑ Makortoff, Kalyeena (31 March 2021). "Credit Suisse aims at wind-up orders for Gupta's Liberty arm". Guardian News & Media Limited.
  7. ↑ "Subscribe to a slice of the FT | Financial Times". www.ft.com. Retrieved 2021-04-08.
  8. ↑ "Credit Suisse Effort to Recoup Greensill Loans Faces Roadblock". Dow Jones & Company, Inc. The Wall Street Journal. 1 April 2021.
  9. ↑ Gill, Oliver; Millard, Rachel (3 April 2021). "Gupta acquired Scottish hunting estate in taxpayer-backed deal with SNP". Telegraph Media Group Limited.
  10. ↑ Gibson, Lara; Ross, Andrew (13 May 2021). "Investors Circle Sale of GFG Alliance French Assets Ascoval, Hayange; Rothschild Running Accelerated M&A". Reorg.
  11. ↑ "GFG Alliance - an international alliance of businesses". GFG Alliance. Retrieved 11 December 2018.
  12. 1 2 Nelson, Eshe; Ewing, Jack; Alderman, Liz (2021-03-28). "The Swift Collapse of a Company Built on Debt". The New York Times. Retrieved 2021-03-31.
  13. ↑ "Lobbyist Portal". www.lobbyists.sa.gov.au. Retrieved 2021-06-14.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.