Credit Suisse’s restructuring deal with Sanjeev Gupta’s GFG in doubt 

A RESTRUCTURING deal between Sanjeev Gupta’s GFG Alliance and Credit Suisse has been thrown into doubt, after the steel group failed to make a payment on time.

GFG missed the date for the upfront payment under the restructuring agreement, putting the planned deal on hold, Credit Suisse said on Monday (Jan 29).

GFG, a group of steel companies controlled by Gupta, had agreed a restructuring in principle in 2022 with Credit Suisse’s asset management arm for its UK and US businesses, but that deal looks to be in jeopardy.

“The proposed payment date for the upfront cash portion of the agreement in principle has passed without payment, the settlement deed will not be implemented as envisaged,” the Swiss lender said in an update to investors. “CSAM continues discussions with GFG and is considering all options to maximise investor returns.”

The money that GFG owes relates to a series of transactions in which money was advanced to companies in the steel group by Greensill Capital, using cash from Credit Suisse fund investors. Those vehicles were shuttered in March 2021 as Greensill collapsed, but the process of liquidating the funds and returning money to investors is still ongoing despite the debts being described in fund documentation as short-term working-capital loans.

Gupta’s GFG was a key Greensill customer and made up a large portion of the Credit Suisse’s funds exposure.

“We continue to work towards a consensual debt restructuring with the main creditors of Greensill that is in the best interest of all parties,” a GFG Alliance spokesperson said.

Credit Suisse was taken over by UBS Group in an emergency deal in March last year, after a collapse in investor and client confidence. The Greensill matter adds to the list of legal headaches that UBS inherited from its former rival.

Credit Suisse supplied billions of US dollars in loans to GFG, many of which were packaged and sold onto investors in the funds.

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Greensill fell into administration after a key insurance partner didn’t renew coverage on loans made to some of its customers. Deals involving Greensill and GFG are the subject of a Serious Fraud Office investigation.

The steel group owes around US$887 million to investors in the Credit Suisse managed funds, according to the document. GFG repaid Credit Suisse’s fund investors for debt related to its Australian operation last year but debts related to the group’s US and UK operations remain.

Credit Suisse had issued winding-up proceedings against a key Gupta entity in 2022, but those proceedings were stayed as the parties attempted to reach a restructuring agreement. BLOOMBERG