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Liberty Steel CEO writes letter to Financial Times


The top manager was upset by the publication of this publication dedicated to the latest acquisitions of Liberty Steel under the title "How Sanjiv Gupta's empire is fueled by opaque funding "

Liberty Steel CEO writes letter to Financial Times

On September 27, the Financial Times published an article "How Sanjeev Gupta's Empire Is Fueled by Opaque Funding", in which it accused the investment holding GFG Alliance of hiding sources of investment in recent deals in Europe, including at a steel plant in Galati (Romania).

In less than five years, the GFG Alliance, the Gupta family's business empire, has grown from a little-known commodity trading company to a $ 20 billion manufacturing company, the Financial Times noted.

“Liberty signed a new € 2.2bn loan to finance the purchase of a steel plant from ArcelorMittal (a steel mill in Galati, Romania - Ed.), employing 14,000 people, and making Liberty the third steel producer on the continent overnight ... The loan is secured by the enterprises' receivables - debts to clients - and is three times the price Mr. Gupta paid for the assets, ”the newspaper said.

"Reverse factoring", where financial institutions pay the company's suppliers a prepayment instead of the company itself, can mask the growing loans of a troubled company, reporters warned, referring to Liberty Steel's financing schemes.

Liberty Steel CEO Sanjeev Gupta found it necessary to clarify his position on this issue and wrote a letter to the Financial Times, where he talked about the company's use of "alternative sources of capital, such as supply chain financing, to support new acquisitions, in order to unlock value and save valuable jobs. ”

“Supply chain finance and asset-based lending remain an important source of finance for the non-listed company and our long-term intention is to go public as our businesses merge,” Gupta said.

He reaffirmed the company's intention to invest 200 million euros in Galati and the desire to revive the mothballed workshops of the Romanian plant.

“According to the British Embassy, ​​this acquisition is the largest UK investment in this country, and we intend to invest another 200 million euros to secure a future for our employees,” Gupta wrote.

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