Credit Suisse Group AG has commenced court action in Australia seeking the liquidation of two companies owned by Sanjeev Gupta, as part of its global push to recoup capital lent to Gupta’s metals empire via the failed Greensill Capital.
Citibank N.A.’s London branch filed the application on behalf of Credit Suisse in the New South Wales Supreme Court on Tuesday seeking to wind up two entities — Onesteel Manufacturing Pty Ltd., which operates the Whyalla steel operation in South Australia, and Tahmoor Coal Pty Ltd. A first direction hearing on the action is scheduled for May 6, a spokeswoman for the court said by email.
“Any proceedings instituted by Credit Suisse will be vigorously defended,” a spokesman for Gupta’s GFG Alliance Ltd. in Australia said by email. “GFG Alliance’s Australian Mining and Primary Steel (MPS) business, which includes Onesteel Manufacturing and Tahmoor Coal, does not conduct any financing with Credit Suisse and has not sold receivables to Credit Suisse.”
A spokesman for Credit Suisse in Australia declined to comment.
GFG Alliance is in talks with Greensill’s administrators, Grant Thornton, and other stakeholders to negotiate a way forward, the spokesman said, adding that MPS was well advanced on plans to refinance its Greensill facilities. “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.”
Gupta last week urged creditors not to “destroy value” by calling in debts and said he would battle through litigation if needed, as the industrialist scrambles to save his metals empire after the collapse of its biggest lender. GFG employs about 35,000 people in 30 countries, with large metal and steel businesses stretching from Romania to Australia. Uncertainty now hangs over those jobs, given the group’s mammoth $5 billion debt to Greensill.
Credit Suisse has also started legal action against one of Gupta’s key commodities trading units. An application to wind up Liberty Commodities Ltd. was filed in the U.K.’s insolvency court late Tuesday by a unit of Citigroup. Citi was acting under instructions from Credit Suisse, according to a person familiar with the matter who asked not to be identified discussing private information.
