Gupta’s Liberty Steel agrees standstill deal with Greensill Bank

LONDON (Reuters) – The Liberty Steel group owned by commodities tycoon Sanjeev Gupta said it has reached a standstill agreement with its largest creditor Greensill Bank on debt facilities for its European business.

Gupta’s family conglomerate, GFG Alliance, has been scrambling to arrange refinancing for its cash-starved web of businesses in steel, aluminium and energy after supply chain finance firm Greensill filed for insolvency in March last year.

German-based Greensill Bank is a subsidiary of Greensill Capital, which lent money to firms by buying their invoices at a discount, but collapsed after one of its main insurers declined to renew its cover.

The standstill deal pauses all enforcement actions until the end of October and can be extended until the end of the year, a statement said, without saying how much the debt facilities were.

“We are working intensively towards a settlement with our major creditors in a timeframe which would obviate the need for a legal battle,” it added.

Britain’s Serious Fraud Office (SFO) stepped up a probe into GFG last month as teams of investigators demanded documents such as balance sheets, annual reports and other correspondence.

The SFO last year opened its investigation into suspected fraud, fraudulent trading and money laundering at the Gupta Family Group Alliance (GFG).

A GFG spokesperson declined to comment at the time, but an internal memo seen by Reuters said the company had consistently rejected any wrongdoing and pledged full cooperation.

(Reporting by Eric Onstad, Editing by Louise Heavens)