LONDON : The Italian government guaranteed a loan of 86 million euros ($ 102 million) from Greensill Bank, part of the collapsed Greensill Capital group, to one of the firms of steel magnate Sanjeev Gupta, according to the accounts filed with the Italian Companies Register in recent weeks.
The company, Liberty Magona SRL, has obtained a guarantee from SACE SpA, the Italian state-controlled export credit agency, for the loan as part of measures to help companies weather the crisis. coronavirus, according to Liberty Magona’s accounts for a period from January 1, 2019 to June 30, 2020 which includes information on significant events after the end of the year.
Piombino-based Liberty Magona, which makes galvanized steel, said the three-year loan was taken in late August last year to bolster its finances at a time when it faced weaker demand for its products due to the pandemic.
Italy’s Ministry of Economy and Finance did not immediately respond to a request for comment. GFG Alliance and Greensill declined to comment on the loan.
The German financial regulator has filed a criminal complaint against Greensill Bank, based in Bremen.
The Greensill Capital Group filed for bankruptcy in Britain and Australia this month, citing $ 5 billion exposure to Indo-British businessman Gupta’s GFG alliance. He said Gupta’s businesses had started to default on their obligations.
GFG, an umbrella company in Gupta’s network of steel, aluminum and energy companies, said last week it was seeking additional working capital to help it cope with conditions of difficult markets, but was also operationally sound and benefited from buoyant steel markets.
GFG Alliance employs 35,000 people in 30 countries, according to its website. In Britain, the opposition Labor Party has said the government should consider nationalizing the company if it cannot get the financial support it is trying to attract.
Italy is not the only country to have granted guarantees to Gupta companies. The Scottish government gave the group a £ 575million guarantee in 2016, Reuters reported in 2019, citing people familiar with the matter.
British media reported that the London government has also guaranteed hundreds of millions of loans to GFG Alliance or related companies under coronavirus loan programs.
Never miss a story! Stay connected and informed with Mint. Download our app now !!