Morgan Stanley, ICBC Standard Bank losing confidence in Sanjeev Gupta’s GFG Alliance, considers selling the loan

Morgan Stanley and ICBC Standard Bank are considering selling part of a loan, which they lend to a crucial business unit of Sanjeev Gupta’s GFG Alliance. This is a hint which speaks that lenders are gradually losing confidence in the metal producing group.

According to an industry professional, the two financial giants have initiated discussions with potential buyers of their exposure to debt that financed GFG subsidiary Liberty Industries France’s acquisition of Rio Tinto’s aluminium smelter in 2018.

However, it has also been stated by the industry professional: “The process is at an early stage and may not lead to a sale”

All three parties have not commented on the transaction, as of yet.

The aluminium plant at Dunkirk, northern France is Europe’s largest aluminium smelter and is especially one-off Sanjeev Gupta’s premier industrial assets.

Trafigura, one of the world's leading independent commodity trader participated apace with a syndicate of banks in the $350 million loan financing. The Dunkirk aluminium smelter loan is one of the few lines of credit GFG Alliance raised from lenders apart from Greensill Capital.

GFG is also negotiating with the French government and lenders over access to a potential loan of about €70 million through a state-backed Covid-19 relief program.

In a different aspect, the industrial conglomerate is being investigated by French authorities concerning the disappearance of a loan provided by Greensill Capital to GFG-owned Liberty Aluminium Poitou, in central France.

As per our sources, on 30^th March 2021, a Citigroup Inc. subsidiary has applied to close down a vital GFG commodities-trading unit on behalf of Credit Suisse Group AG.