Liberty Steel Reaches a Standstill with Greensill Bank

Sanjeev Gupta's Liberty Steel has announced a standstill agreement with its largest creditor, Greensill Bank AG, on credit lines related to its European steel business.

The deal will continue until October 31st and may be extended until the end of the year, giving Gupta's GFG Alliance room to seek new funding. The German bank, which was acquired by Greensill Capital before it collapsed last year, held most of the $5 billion loans Gupta received from the fintech company.

The reconciliation shows Gupta's progress in his attempt to reconstruct the debt of his vast metal empire. He is still facing bankruptcy proceedings from Credit Suisse Group AG, which was in debt through a fund that bought Greensill Capital bonds.

Bremer-based Greensill Bank was closed by BaFin Regulatory Authority in March 2021 because it could not find evidence of assets associated with the GFG on its balance sheet. Greensill is currently facing a criminal investigation in Germany while the bank itself is under control.

As creditors approach, Gupta has already lost several assets. The collapse of his biggest financier deprived his company of significant working capital and forced him to sell two steel mills in France. Private equity firm American Industrial Partners also dominated the prized aluminum smelter in Dunkirk after defaulting on its debts.