Sanjeev Gupta’s coal business in Australia in trouble?

Tuesday 06th April 2021 14:20 EDT

On Tuesday 6th April, an application was lodged in the NSW Supreme Court to wind up the operations of two companies, including OneSteel Manufacturing which runs the steelworks, which employs more than 1,200 workers. Creditors are now pushing to break up the Australian empire of British billionaire Sanjeev Gupta and the application has been made by Citibank, ABC news reported. There are two defendants in Citibank's action — the first is OneSteel Manufacturing Pty Ltd (trading as Liberty Primary Steel), and the second is Tahmoor Coal Pty Ltd.

These reports appear after the collapse of one of the major lenders to Mr Gupta's GFG Alliance, Greensill Capital. Greensill has been placed in the hands of administrators Grant Thornton after global wealth manager Credit Suisse froze billions of investment funds that it was dependent on.

Citibank filed the action on behalf of Credit Suisse, and it follows a similar application by Citibank in London. In a statement to ABC news, a GFG Alliance spokesperson said that "any proceedings instituted by Credit Suisse will be vigorously defended".

"GFG Alliance's Australian Mining and Primary Steel (MPS) business, which includes OneSteel Manufacturing Pty Ltd and Tahmoor Coal Pty Ltd, does not conduct any financing with Credit Suisse and has not sold receivables to Credit Suisse.

"The Australian businesses are performing well and generating positive cash flow, supported by the operational improvements we've made and strong steel and iron ore markets."

The spokesperson said GFG remained in "constructive discussions" with Greensill's administrators.

Mr Gupta has previously insisted that there were "no plans to sell any of our core businesses", and said GFG was now taking "strong, prudent steps" towards recovery.

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