GFG faces insolvency battle as Credit Suisse pulls debt talks - report

Sanjeev Gupta’s GFG Alliance faces insolvency after Credit Suisse pulled out of debt settlement talks, according to reports on Tuesday.

GFG will face an insolvency hearing in private on Tuesday, after more than a year of trying to hold off its creditors and find a source of new funding after the collapse of its main lender, supply-chain financier Greensill Capital, the Financial Times reported, citing unnamed people familiar with the process.

Funds run by Credit Suisse were significant backers to Greensill. Companies in GFG Alliance owe the Swiss investment bank more than $1bn (£810m).

The first hearing will decide whether GFG’s problems were primarily caused by Covid-19 and so whether it qualifies for more leeway, the report stated.

Citigroup filed winding-up petitions on behalf of Credit Suisse more than a year ago, but it has held off enforcing them while Gupta has tried to find new financing.

GFG has insisted it was close to securing new cash, but its also faces several criminal investigations. Britain's Serious Fraud Office is investigating alleged fraud related to GFG and Greensill, while the French government has alleged in private that it has concerns over money laundering in the metals group’s European operations.

Investigators have attended GFG properties in both the UK and France in search of evidence in the past month. Credit Suisse declined to comment. GFG Alliance was approached for comment.

Greensill was founded in 2011 by Australian Lex Greensill and filed for insolvency protection in March last year.