There is no relief yet to India-born British businessman Sanjeev Gupta and his company, GFG Alliance. With the UK government rejecting a bailout request from Sanjeev Gupta’s GFG Alliance, the company seems to be in trouble yet again.
The company had requested a bailout package worth 170 million-pound ($234 million). The company feels this bailout will help the company which is struggling to stay afloat following the collapse of its biggest lender, Greensill Capital. The lender provided $5 billion of credit facilities to GFG.
The bailout plan was rejected by the British lawmakers after they found the structure and corporate governance of GFG concerning and over fears that bailout money may be used to save businesses in other countries as well.
In a podcast (before the bailout package was rejected), Gupta said that most of the business overseas was doing well but there may be some impact. However, it is the UK business that has taken the hit.
Gupta said that with an aim to run a corporate entity it consolidated all our businesses all over the world. The present year was supposed to be the second consolidated audit for the company. The company had even plans to go to the financial market and diversify its funding.
The group employs 35,000 people globally. In the UK, it has around 5,500 employees and 3,000 of them are employed at Liberty Steel. The fear looms that without bailout thousands of jobs may be at risk. In the podcast, he said that he will do whatever it takes to support his employees.
Meanwhile, the ministers are “closely monitoring developments around Liberty Steel and continue to engage closely with the company, the broader U.K. steel industry and trade unions,” the government said in an emailed statement to Bloomberg. “Our unprecedented package of Covid support is still available to the sector to protect jobs and ensure that producers have the right support during this challenging time.”
On Monday, GFG said in a statement that most of its businesses globally “are performing well and generating positive cash flow,” and that it’s taking “prudent steps” to manage its resources. In the UK, Liberty is working on solutions to provide additional working capital facilities to replace the funding gap left by Greensill said GFG in the statement.
In the case of day to day operations, GFG plants are under control and doing clean up.
The company has no plans to sell any part of business, Gupta had stated.