LONDON, March 19 (Reuters) – The Italian government guaranteed an 86 million euro ($ 102 million) loan from Greensill Bank, part of the collapsed Greensill Capital group, to one of the companies of steel magnate Sanjeev Gupta, according to accounts filed with the Italian firm. the registry in the last few weeks.
The company, Liberty Magona SRL, secured guarantees from SACE SpA, Italy’s state-controlled export credit agency, for loans under measures to help the company deal with the coronavirus crisis, according to Liberty Magona’s account for the period from January 1, 2019 to June 30, 2020 which includes post-year event material information.
Piombino-based Liberty Magona, which makes galvanized steel, said the three-year loan was taken out in late August last year to bolster its finances at a time of 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. The GFG Alliance and Greensill declined to comment on the loan.
The German financial regulator has filed a criminal complaint against Bremen-based Greensill Bank.
The Greensill Capital Group filed for bankruptcy protection in the UK and Australia this month, citing a $ 5 billion exposure to the GFG Alliance of India-UK entrepreneurs Gupta. It is said that the Gupta company began failing to fulfill its obligations.
GFG, an umbrella company for the steel, aluminum and energy company network Gupta, said last week it wanted to secure additional working capital facilities to help it face challenging market conditions but also be operationally strong and benefit from a buoyant steel market.
The GFG Alliance employs 35,000 people in 30 countries, according to its website. In Britain, the opposition Labor Party says the government should consider nationalizing companies if it cannot secure the financial support it is trying to attract.
Italy is not the only country that provides guarantees to the Gupta company. The Scottish government provided 575 million pounds bail to the group in 2016, Reuters reported in 2019, citing people with knowledge of the matter.
British media have reported that the London government has also secured hundreds of millions of loans to the GFG Alliance or related companies under the Coronavirus lending scheme.
$ 1 = 0.8391 euro Reporting by Tom Bergin; Edited by Howard Goller