Liberty borrowed billions from Greensill as of Dec 2019

Gupta Family Group Alliance (GFG Alliance) utilised $1.716bn of different forms of financing from Greensill and its subsidiaries, out of total available financing of $1.76bn, according to internal company documentation from December 2019 obtained by Argus.

GFG Alliance is a loose-knit collection of entities that includes Liberty Steel.

Liberty stopped making payments on some Greensill facilities this week, according to a source close to the company, after it ran into financial difficulty.

Greensill's problems mean Liberty will have to refinance working capital at a time when its finances are under close scrutiny, and as some suppliers push for cash-up-front payments when there is no credit insurance, or at least look to move shorter-terms.

Liberty's largest single facility, according to the documentation, was a $1bn uncommitted repurchase agreement finance facility with Royal Bank of Canada. As of March 2019, $793.2mn of the facility was used, it said. This facility, for Liberty Commodities, finances primarily its trading of nickel.

One smaller financier told Argus that it had severed ties with Liberty because of uncertainty over the company's financial health. Wyelands Bank, owned by Sanjeev Gupta, had a $5.3mn uncommitted accounts receivable facility with Liberty Commodities, which was fully utilised as of March 2019, the documentation shows. Wyelands also had a $7mn receivable facility with Simec Group.

Concern over UK companies

In the accounts to March 2019 of Singapore-incorporated Liberty House Group — which sits beneath SKG Global Holdings and LHG International Holdings in the corporate structure — auditor Baker Tilly said a few of the group UK companies had incurred losses since incorporation and could have negative equity or net-current liabilities that would question their going concern status should further losses be incurred.

Liberty Speciality Steels, one of the group companies that has lost money, received a term loan from Together Loans for £12.5mn, secured against property, according to the documentation. The loan had an interest rate of 11pc.

Some suppliers to Liberty Speciality Steels have been requesting cash up front of late, given concerns over the company's financial state.

The results to March 2019 also show that Liberty Steel Holdings was sold to SKG Global for a considering of $9.5mn, registering a profit of $6.8mn. Sanjeev Gupta was the sole shareholder of both companies. The group as a whole made a profit after tax of $93.5mn. The income of Liberty Commodities dwarfed every other part of the business, taking in $7bn at earnings before interest, taxes, depreciation, and amortisation (Ebitda) of $122/t, compared with $1.6bn for the industries segment at Ebitda of $77/t.

By Colin Richardson