STEEL EMPIRE OF SANJEEV GUPTA IS BURSTING AT THE SEAMS

Three factories in France, employing 850 employees and producing spare parts for the automotive industry, are planning to file an application for legal protection from creditors this Friday.

The factories are owned by Alvance Aluminum, a division of the GFG Alliance, owned and operated by Indian-born British Sanjeev Gupta.

In early April, Gupta said he ruled out the possibility of a complete closure of the plants. According to him, the GFG Alliance consortium, the main asset of which is Liberty Steel, continues to be one of the most successful enterprises in the world. The company employs 35 thousand employees, and its profitability is $ 20 billion.

However, two foundries in Poitou and a plant near Châteauroux producing alloy wheels went bankrupt. These enterprises are still the first in the huge Gupta empire to go through the courts. The main customers of the plants' products were the automobile manufacturing companies producing the Peugeot and Renault brands. Despite the fact that investments in the development of production exceeded € 45 million, after the collapse of Greensill Capital, it became impossible to continue providing financial support to unprofitable plants.

According to a representative of Alvance Aluminum, the bankruptcy will not affect other enterprises in France, Belgium and Scotland. All of them will continue to operate, as they have a strong market position and sufficient financial support.

The main reason for the financial problems, according to experts, was the refusal of many manufacturers from diesel engines and high competition from foreign companies

The GFG Alliance has made a statement that the collapse of Greensill Capital will not directly affect the operation of the enterprises. However, Gupta is known to have suspended negotiations to acquire new steel mills in Germany and Hungary. In particular, the billionaire had a plan to become the owner of an entreprise owned by ThyssenKrupp, as well as the Hungarian Dunaferr plant, which is owned by the residents of Ukraine.

Representatives of the British aerospace industry also express concern about the state of affairs at GFG enterprises. Representatives of the holding company ADS Group, which unites companies for the production of Airbus and Rolls-Royce, appeal to the UK government, demanding to intervene in the situation. A number of Liberty Steel's counterparties have already announced that they are now demanding prepayment from GFG metallurgical enterprises for the supplied materials and equipment.

The crisis at the Liberty Steel, which employs 3.5 thousand employees, could lead to a shortage of corrosion-resistant high-strength steel used in the industry. These are two sites in South Yorkshire owned by the Liberty Steel. The fact is that some of the bank accounts of subsidiaries owned by the company in the UK have already expired.