Liberty Steel close to $5bn debt agreement

SANJEEV GUPTA, the metals tycoon, is close to a deal with creditors of Liberty Steel to pay back around half of the money they lent the troubled business.

Mr Gupta has reached an understanding with creditors to Lex Greensill’s former lending empire including Swiss bank Credit Suisse in a “major step” towards refinancing the firm.

Liberty Steel had borrowed $5bn (£4bn) from ventures founded by Australian entrepreneur Mr Greensill, which loaned money to companies short term. It collapsed after one of its insurers refused to renew cover.

Credit Suisse brought a High Court claim against Liberty Steel last year in an attempt to recoup the funds. A repayment deal could mean Liberty Steel avoids being pushed into insolvency.

“The agreement remains subject to documentation and the respective internal approvals,” the company said.

Creditors are likely to get back 55pc or less of their investment, the Finan- cial Times reported. Liberty Steel declined to comment.

Jeffrey Kabel, chief transformation officer at Liberty Steel, said: “After several months of negotiations, we have now reached an agreement in principle that will provide recovery for the creditors and will significantly deleverage and derisk Liberty.”

As well as juggling a large debt pile, Liberty Steel is pursuing an ambition to slash its carbon output by 2030. Mr Gupta’s GFG Alliance, the umbrella for his investments, is subject to an ongoing investigation by the Serious Fraud Office and French authorities over suspected money laundering, which GFG denies.

He also awaits a decision from a court in Belgium over the fate of two of his steel mills, a case that comes in the wake of losing control of an aluminium mill in the country last year.

If he loses he could be forced to sell the plants.