Gupta Family Group Alliance (GFG Alliance) is an international group of businesses associated with businessman
Sanjeev Gupta
Sanjeev Gupta (born September 1971) is an Indian-born British businessman, and the founder of Liberty House Group. He is the CEO and chairman of GFG Alliance, an international conglomerate that operates primarily in the steel and mining indu ...
and the British Gupta family. Collectively, companies in the alliance are involved in mining, industry and trading.
History
In March 2021, GFG Alliance was struggling to secure new financing after the collapse of one of its lenders,
Greensill Capital
Greensill Capital was a financial services company based in the United Kingdom and Australia. It focused on the provision of supply chain financing and related services. The company was founded in 2011 by Lex Greensill. It filed for insolvency ...
. GFG was put under brief observation by the German financial regulator
BaFin
The Federal Financial Supervisory Authority (german: Bundesanstalt für Finanzdienstleistungsaufsicht, Bundesanstalt für Finanzdienstleistungsaufsicht) better known by its abbreviation BaFin is the financial regulatory authority for Germany. It ...
for their business with Greensill.
On 31 March
Credit Suisse
Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and is one of the nine global " ...
began insolvency proceedings against
Liberty Commodities Limited, a GFG subsidiary, at a London court. The action was brought by another bank,
Citigroup
Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
, which was acting under instruction from Credit Suisse. It related to Credit Suisse's supply-chain
investment funds
An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages inc ...
, worth nearly $10 billion, whose funds were party invested through Greensill Capital, which had placed $3.6 billion in GFG, part of which had funnelled down to LCL. It was expected for the balance sheet of Credit Suisse to absorb significant damage as a result.
The bank also launched insolvency proceedings against other entities affiliated with GFG. According to ''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', Credit Suisse would face difficulties in recouping the funds, as Greensill had split up loans backing the funds' investments (including loans granted to GFG Alliance) into a double trust structure.
On 3 April 2021, it came to light that the Jahama Highland Estates (formerly the "
Alcan
Alcan was a Canadian mining company and aluminum manufacturer. It was founded in 1902 as the Northern Aluminum Company, renamed Aluminum Company of Canada in 1925, and Alcan Aluminum in 1966. It took the name Alcan Incorporated in 2001. During t ...
Estate") had been purchased in 2016 as part of the
Rio Tinto Mines
Rio Tinto Group is an Anglo-Australian multinational company that is the world's second-largest metals and mining corporation (behind BHP). The company was founded in 1873 when of a group of investors purchased a mine complex on the Rio Tinto ...
deal for the Lochaber aluminium plant, because the furnace requires so much power that the smelter is located near a hydroelectric plant, which drains the basin of the 114,000 acre Estate. Alcan designed all their smelters that way. The Estate includes the north face of
Ben Nevis
Ben Nevis ( ; gd, Beinn Nibheis ) is the highest mountain in Scotland
Scotland (, ) is a Countries of the United Kingdom, country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland ...
. According to reports, the
Scottish National Party
The Scottish National Party (SNP; sco, Scots National Pairty, gd, Pàrtaidh Nàiseanta na h-Alba ) is a Scottish nationalist and social democratic political party in Scotland. The SNP supports and campaigns for Scottish independence from ...
mandated that the Estate never be split from the hydro plant and aluminium smelter but Gupta ignored them and placed ownership of the Estate in a company that is domiciled on the
Isle of Man
)
, anthem = "O Land of Our Birth"
, image = Isle of Man by Sentinel-2.jpg
, image_map = Europe-Isle_of_Man.svg
, mapsize =
, map_alt = Location of the Isle of Man in Europe
, map_caption = Location of the Isle of Man (green)
in Europe ...
. The 2016 deal was worth £330 million and was guaranteed by the UK
Chancellor of the Exchequer
The chancellor of the Exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and head of His Majesty's Treasury. As one of the four Great Offices of State, the Chancellor is ...
. Conservative finance spokesperson
Murdo Fraser
Murdo MacKenzie Fraser (born 5 September 1965) is a Scottish politician who served as Deputy Leader of the Scottish Conservative Party from 2005 to 2011. He has been a Member of the Scottish Parliament (MSP) for the Mid Scotland and Fife reg ...
was critical about the alleged breach of the SNP agreement and urged the SNP to "take whatever steps are necessary to protect public funds".
In May 2021 investors began to pay more attention to the sale of GFG Alliance's French steel plants Ascoval and Hayange causing GFG Alliance to hire Rothschild to run an accelerated M&A process of the two assets.
Structure
The GFG Alliance includes:
*
Liberty House Group
Liberty Steel Group Holdings UK Ltd (LHG), which is also referred to as Liberty House or Liberty House UK, is a British industrial and metals company founded in the United Kingdom in 1992 by industrialist Sanjeev Gupta. It is headquartered in L ...
, founded by
Sanjeev Gupta
Sanjeev Gupta (born September 1971) is an Indian-born British businessman, and the founder of Liberty House Group. He is the CEO and chairman of GFG Alliance, an international conglomerate that operates primarily in the steel and mining indu ...
in 1992
*
SIMEC Group
SIMEC Group Ltd is a British international energy and natural resources business focused on resources, sustainable power, infrastructure, and commodities trading. In 2016 it had an annual turnover of almost USD2.5 billion and net assets of U ...
, founded by Gupta's father Parduman K Gupta in 1996
* Wyelands financial services
** Wyelands Bank
** Wyelands Capital
* Jahama Estates
** Jahama Highland Estates, the 5th largest private landowner in Scotland
Miscellaneous divisions
* Alvance Aluminium
Poitou
Poitou (, , ; ; Poitevin: ''Poetou'') was a province of west-central France whose capital city was Poitiers. Both Poitou and Poitiers are named after the Pictones Gallic tribe.
Geography
The main historical cities are Poitiers (historical c ...
, a French aluminium operation
* an aluminium warehouse in
Dunkirk
Dunkirk (french: Dunkerque ; vls, label=French Flemish, Duunkerke; nl, Duinkerke(n) ; , ;) is a commune in the department of Nord in northern France.[France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...]
[
]
Lobbying
GFG Alliance's interests are represented to the South Australian parliament by lobbying firm, Bespoke Approach.
References
{{Energy-company-stub
External links
Official website
Energy companies of the United Kingdom
Holding companies of the United Kingdom