GFG tycoon Sanjeev Gupta vows to fight UK steelmaker’s bankruptcy and save hundreds of jobs
Sanjeev Gupta’s GFG Alliance has vowed to “fight” a New York investment fund’s bid to plunge one of its major customers into bankruptcy after fully acquiring the firm earlier this month.
GFG is seeking to block West Midlands steel products maker Aartee Bright Bar from collapsing into insolvency after the manufacturer’s main creditor, FGI, decided to enforce its debts
US fund FGI filed insolvency proceedings against Aartee Bright Bar earlier this month, in a process that saw the West Midlands firm forced to appoint Alvarez & Marshal as its bankruptcy administrator.
GFG is now seeking to block those proceedings from going through, after the steelmaking conglomerate fully acquired Aartee Bright Bar’s parent company, Aartee Group, on 17 February.
Engineering products maker Aartee Bright Bar is a major buyer of GFG’s steel via the conglomerate’s Liberty Steel UK business.
GFG’s rescue plan would see Aartee Bright Bar fully integrated into Liberty’s steel business, with a view to saving 250 jobs.
Liberty exec Jeffrey Kabel said: “GFG believes the administration is unjustified and unnecessary, and risks an ongoing insolvency process that will lead to significant job losses and a fire sale of the business’ assets.”
Aartee Bright Bar currently employs 250 people at its manufacturing facility in Willenhall near Wolverhampton.
GFG’s bid to block Aartee’s bankruptcy comes as Gupta’s steelmaking empire is in negotiations with its own creditors to block GFG from being plunged into insolvency itself.
Gupta’s business fell into serious financial difficulties following the collapse of its major creditor, Greensill, in 2021.
Gupta was previously hailed as the saviour of Britain’s ailing steel industry, after his Liberty Steel business snapped up Tata Steel’s Rotherham arm for £100m in 2017.
Gupta has, however, come under mounting scrutiny in recent years, over the opacity of GFG’s business and its heavy reliance on supply chain financing.
Conservative MP Richard Fuller in March 2021 raised concerns GFG’s business “has the characteristics of a potential ponzi scheme”.
The UK’s Serious Fraud Office (SFO) in April 2022 later raided offices linked to Gupta’s Liberty steel business, just a day after French authorities launched similar raids on addresses linked to the tycoon.