Sanjeev Gupta’s Liberty Steel Group has struck a deal with its largest creditor to give it more time to refinance its debts.
The embattled steel manufacturer has agreed a “standstill agreement” with collapsed German financier Greensill Bank to pause all enforcement actions against Liberty, over debt facilities provided to the firm in 2019.
The deal will put a temporary stop on any enforcement action against Gupta’s steelmaking business until at least October 2022, while also giving the option of an extension until the end of the year.
Greensill Bank lent money to Gupta’s firms by buying invoices at a discount price, before the firm – a former subsidiary of collapsed financier Greensill Capital – was shut down by Germany’s financial watchdog BaFin last year, following the discovery of potential balance sheet manipulations.
A Liberty Steel spokesperson said the firm is “working intensively towards a settlement with our major creditors that would obviate the need for a legal battle.”
“Our core businesses continue to perform well and are operationally strong despite some economic headwinds,” the company spokesperson said.
The deal comes less than a week after Gupta’s GFG Alliance failed in its bid to throw winding up orders, for three of its companies, out of court, after talks collapsed with Credit Suisse.