Brookfield walks away from Sanjeev Gupta loan talks
Brookfield has ended talks with Sanjeev Gupta over a loan project worth hundreds of millions of dollars, dealing a blow to the British industrialist’s efforts to secure financing beyond its main lender Greensill Capital.
The Financial Times revealed last week that Gupta, dubbed the UK’s ‘savior of steel’ for its acquisitions of unloved metal factories, had been in talks with the Canadian asset manager about a secured loan on an interest in one of its most valuable assets.
However, people familiar with the matter said those talks have now collapsed without a deal. The proposed loan was reportedly held by a holding company above Gupta’s InfraBuild, an Australian steel and recycling company that is considered one of the most stable assets in the industrialist’s GFG Alliance empire. .
Brookfield, an investment powerhouse with more than $ 500 billion in assets, was the only potential lender Gupta had had discussions with, people familiar with the matter said last week when the talks were first reported. time.
Talks break off as Credit Suisse frozen withdrawals $ 10 billion in investment funds linked to Greensill, with Swiss bank executives particularly concerned about their exposure to Gupta’s activities, according to people familiar with the matter.
Greensill, which is backed by SoftBank and advised by former UK Prime Minister David Cameron, has provided billions of pounds in financing in recent years to the GFG Alliance – a collection of family-owned businesses which, through a wave of acquisitions, has provided billions of dollars in funding to the GFG Alliance has evolved into a sprawling empire. , ranging from metals to banking, with $ 20 billion in revenue.
The German financial regulator BaFin is also pushing a banking subsidiary of Greensill to reduce exposure to Gupta after surveying the bank’s balance sheet and raising concerns about the level of risk associated with a single customer.
While talks with Brookfield began when Gupta was looking to buy the steel business from Thyssenkrupp, in what would have been one of his biggest deals to date, he was still looking to borrow money after the steelmaker German interrupted discussions last month, people said.
A spokesperson for the GFG Alliance said it “has adequate funding for its current needs and its refinancing plans to broaden its capital base and secure longer term funding are progressing well.” The group “is benefiting from a recovery in the steel and aluminum markets, which means that most of our activities are operating near full capacity to meet strong demand and generate positive cash flow”, said he declared.
Brookfield declined to comment.
Gupta has a close relationship with Lex Greensill, the 44-year-old Australian banker who founded the finance company and who previously held a stake in Greensill Capital. Over the past year, Greensill has also supplied at least tens of millions of pounds of Loans guaranteed by the UK government to companies associated with Gupta.
Greensill, whose slogan is “make finance fairer,” specializes in supply chain finance, where companies borrow money to pay their suppliers. It also provides receivables or factoring facilities, where companies are able to raise funds from customer invoices.
Gupta’s companies have relied heavily on both techniques, which can be expensive and opaque.