American Industrial Partners takes control of the Belgian factory of Sanjeev Gupta

Sanjeev Gupta has lost control of a Belgian aluminum plant to private equity firm American Industrial Partners, effectively dismantling the metals magnate’s aluminum business in continental Europe.

Gupta’s metals group GFG Alliance, which is under criminal investigation over allegations of fraud and money laundering in the UK and France, has fought to refinance more than $5 billion of debt after the collapse of its main lender Greensill Capital last year. GFG has denied any wrongdoing.

AIP, an American takeover company specializing in the takeover and operation of industrial companies, announced on Tuesday that it had taken over control of an aluminum rolling mill located in Duffel, Belgium, from Gupta.

The metallurgy plant is the second the US group seized from GFG last year, having successfully taken over Europe’s largest aluminum smelter in Dunkirk, France, in October.

In both cases, AIP bought out the debt from the original lenders and then called a default. In Duffel’s case, the US buyout group acquired a €96 million loan from Asian investment firm Tor Investment, which was in a UK holding company that owned the aluminum plant.

AIP said it took action due to Gupta’s “failure to refinance the business in the 11 months since the July 2021 defaults” on that loan. In a progress report published in February, the directors of the British holding company also said that efforts to repay the debt were “at a standstill” and that it had not “received satisfactory proposals from Mr Gupta and of its representatives”.

“We look forward to continuing under the new leadership of AIP, which is committed to a sustainable future for our business,” said Duffel Managing Director Geert Vannuffelen. “We are positive about the steps AIP has taken to further invest in the business, which demonstrates their commitment to reaching the full potential of our plant.”

The loss of the Belgian factory is a blow to Gupta, whose Alvance aluminum business has now lost control of all its operations in continental Europe, leaving it with just one foundry in the Scottish Highlands.

It comes days after Gupta failed to have three of its UK steel companies fired on the grounds that their problems were caused by the coronavirus pandemic. The judge in that case also noted that the metals mogul’s efforts to raise new funding had failed, arguing that it “is more likely than not that the reason for not securing alternative funding is the inability to provide financial information to a funder to support funding”.

Gupta last year secured funding from commodities trader Glencore in a bid to repay outstanding debts to Dunkirk and Duffel, but the deal fell through after AIP successfully maneuvered to push two UK holding companies that held the assets under administration.

Late last year, GFG sued one of AIP’s funds in a bid to recover the Dunkirk smelter, arguing that the buyout group’s refusal to agree to a $180 million transfer to repay a debt had been made in “bad faith” in order to “appropriate” the foundry.

AIP rejected the allegation, arguing that accepting the payment could have constituted a “benefit of criminal conduct”, after claiming that the French government had told it “that there were reasons to believe” that the funds had been “hijacked” from a steel mill in the east of the country. Europe. The Financial Times reported last month that documents showed GFG transferred money from a steel mill in the Czech Republic in a bid to settle debt with AIP.

GFG said on Tuesday that it was “committed to doing everything possible to fight against the premeditated and predatory maneuvers of AIP to seize our assets in Dunkirk and Duffel cheaply”.

The company confirmed that it had launched several legal actions against the American private equity firm following its refusal to repay the debt of GFG and Tor Investment. He added that he continued to make “solid progress in restructuring its operations around the world”.

He noted that his recent standstill agreement with Greensill Bank, his biggest creditor which lent him 2.2 billion euros against several of his European steel mills, demonstrated that he was getting closer to a “consensual restructuring of the debt that is in the best interest of all our stakeholders”.

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