Sanjeev Gupta’s GFG Alliance has vowed legal action to scotch what it called a “predatory” attempt by US private equity group American Industrial Partners (AIP) to take control of the largest aluminium smelter in Europe.
Buyout firm AIP said last Friday that it had acquired ownership of the aluminium smelter in Dunkirk after a unit of Gupta’s metals empire had defaulted on outstanding loans.
Today, however, GFG rebuffed AIP’s advance and said: “AIP’s stated position that GFG is in default is incorrect.”
Commodities tycoon Gupta has been scrambling for cash to shore up his crumbling steel, aluminium and energy empire – with creditors circling the assets – ever since the collapse of supply chain finance firm Greensill in March.
And after the price of aluminium reached its highest level since 2007, Gupta fiercely rejected AIP’s attempt to scoop one part of his business he’d been relying upon to stay afloat.
“AIP have resisted all efforts by GFG to make full repayment of its debt, yet they claim GFG is in default,” GFG executive chairman Gupta said.
“This is a cynical and predatory effort to try to acquire our business on the cheap.”
Meanwhile, AIP said that the transfer of ownership had been approved by French authorities and welcomed by France’s economy and industry ministers.
It comes after AIP bought up the majority of the Dunkirk smelter’s debt earlier this year.
GFG said it had held “early discussions” with AIP regarding a potential future sale of the smelter itself, but that “these discussions were quickly ended by GFG due to certain concerns over the negotiations, and the gross under-market valuation AIP put on the business.”
The latest data on the Dunkirk smelter shows it produced 284,000 tonnes of aluminium and employed 550 people in 2018.
GFG did not give any further details of what shape the legal action would take.