Sanjeev Gupta’s GFG Alliance faces a fight against insolvency for some of its key companies after Credit Suisse withdrew from a long negotiation over debts.
GFG will face an insolvency hearing in private on Tuesday, after more than a year of trying to hold off its creditors and find a source of new funding after the collapse of its main lender, Greensill Capital.
Funds run by Credit Suisse were in turn significant backers to Greensill. Companies in GFG Alliance owe the Swiss investment bank more than $1bn (£810m).
The first hearing will decide whether GFG’s problems were primarily caused by Covid-19 and so whether it qualifies for more leeway, according to a person familiar with the matter. The Financial Times first reported on the planned hearings.
Citigroup filed winding-up petitions on behalf of Credit Suisse more than a year ago, but it has held off enforcing them while Gupta has tried to find new financing.
GFG has repeatedly said it is close to securing new funding, but its prospects have been affected by several criminal investigations. The UK Serious Fraud Office is investigating alleged fraud related to GFG and Greensill, while the French government has alleged in private that it has concerns over money laundering in the metals group’s European operations.
Investigators have attended GFG properties in both the UK and France in search of evidence in the past month. Credit Suisse declined to comment. GFG Alliance was approached for comment.
