Sanjeev Gupta has said his companies do not immediately owe any money to Greensill Capital, the collapsed finance company whose administrators are pursuing the metals magnate for billions of pounds.
Gupta, once hailed as the “saviour of steel” for his rescue of metals plants from Wales to Australia, is facing a potential collapse of his industrial and commodities trading empire after creditors filed a flurry of applications in London’s insolvency court to wind up his businesses.
In an interview with BBC Radio 4, the Indian-born industrialist confirmed his companies had “substantial” debts with Greensill Capital, whose collapse last month sparked a corporate and political scandal, pegging the amount at “many billions”.
But the 49-year-old steel magnate hit out at the legal action taken against him this week, denying that any of these debts were due for repayment.
“In this situation, it is natural to some degree that lenders want to protect their position,” Gupta said. “But we also have our position. We have committed facilities from Greensill for three years, according to us these debts are not due.”
It makes “no sense” for any creditors to “destroy jobs but more importantly to destroy value, because that is the value which will give them the recovery,” he added.
On the future of his Liberty Steel business, Britain’s third-biggest steel company that employs 5,000 workers, he was unequivocal: “None of my steel plants, under my watch, will be shut down.”
The pledge came ahead of a crunch meeting later on Thursday between Gupta, Greensill’s administrator Grant Thornton and Credit Suisse, whose investment funds have more than $1bn of exposure to his metals plant and commodities trading operations, according to two people familiar with the matter.
Credit Suisse was the driving force behind the legal escalation this week, which people familiar with the matter said blindsided the industrialist and his advisers. While Citigroup filed the insolvency applications against Gupta’s businesses, it was acting under instruction as the trustee of bond-like products sold to the Swiss bank by Greensill Capital.
The businesses threatened with insolvency include Liberty Commodities and Gupta’s Sheffield-based plant Speciality Steel, according to two people familiar with the matter.
Grant Thornton this week sent letters to some customers of Liberty Steel ordering them to stop paying the business and instead divert the payments to Greensill, according to documents seen by the Financial Times.
“You are instructed to disregard any instructions from Liberty that may be inconsistent or in conflict with our instructions,” read one of the letters, sent on Tuesday.
Gupta’s GFG Alliance said on Thursday it was “communicating with our customers to ensure appropriate co-operation and business continuity”, and that it “continues to work constructively with Grant Thornton while we try to negotiate a formal standstill”.
Grant Thornton and Credit Suisse declined to comment.