Thousands of steel workers in the UK and Australia under threat

The conglomerate of British entrepreneur Sanjeev Gupta GFG is in a hurry to refinance about $ 4 billion owed to the bankrupt financial company.
More than 35,000 jobs, including thousands in steel mills in the UK and Whyalla in South Australia, are in jeopardy as GFG Group, a conglomerate controlled by British entrepreneur Sanjeev Gupta, tries to refinance an estimated $ 4 billion owed to failed financial firm Greensill.

Greensill's UK operations collapsed on Tuesday and the Australian company heading the group, Greensill Capital, followed suit on Wednesday morning Australian time.

About 5,000 people work for British Steel of the GFG group and about 1,000 work directly in the South Australia plant, but thousands more depend on it as contractors or suppliers, and this is at the heart of the economy of the entire city of Whyalla.

GFG is currently in dispute with Greensill over a debt, and sources with knowledge of the situation said the steel group's efforts to spin off from its financier were complicated because Greensill made loans to several organizations in GFG against collateral of sales made within the group.
“We are currently in a dispute with Greensill over the line of credit,” a GFG spokesman said. "Under the current circumstances, we cannot make any further comments."

A source familiar with GFG's financing said that of the approximately $ 4 billion owed to Greensill, "a very significant portion" - several hundred million dollars - stems from operations in Australia, which include the Whyall steel mill and the steel business. Infrabuild.

Sources say Infrabuild is very profitable, but the aging Whyalla mill, which Gupta is trying to turn into a green steel source, has only recently started to make a profit.

Last week, GFG was blocked from meetings with the South Australian government, which had previously offered a $ 50 million grant to modernize the plant, and unions for the future of the mill.

After the collapse of Greensill, one of Greensill's main sponsors, Credit Suisse, began to defend its interests by appointing managers from McGrathNicol to take control of its shares in the UK operation.

These shares secured a USD 140 million loan from Credit Suisse to Greensill's UK subsidiary, Greensill Capital (UK).

In addition, the Swiss bank has already begun to cut $ 10 billion in loans from Greensill.

Greensill, led by former Bundaberg sugar farm Lex Greensill, has tried to sell itself to the private equity group Apollo Global Management, but European regulators have failed.