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LONDON (Reuters) – GFG Alliance head Sanjeev Gupta said on Friday his conglomerate was holding talks on a standstill agreement with administrators of former financial backer Greensill Capital, which filed for insolvency this week.
The insolvency filing came after Greensill Capital lost insurance coverage for its debt repackaging business. It said in its court filing that GFG Alliance, which is its largest client, had started to default on its debts.
“We are also having constructive discussions with Greensill’s administrators … negotiating a formal standstill agreement,” Gupta said in an internal message to GFG workers made available to Reuters by the company.
Such an agreement “would put on hold arrangements between the two parties and allow both sides more time to assess and negotiate next steps”, Gupta added.
GFG Alliance, an umbrella company for tycoon Gupta’s network of steel, aluminium and energy companies, told trade unions this week it had adequate financing to meet its current requirements, but was seeking long-term alternatives.
“On refinancing, we are enthused by the amount of offers that we have received that reflects the strength of our business,” Gupta said. “However, given the scale of our operations this process will take some time to organise.”
GFG was asking all their businesses to “take prudent steps to manage their cash positions carefully” during the refinancing process, Gupta added.
