British businessman and steel tycoon Sanjeev Gupta is reportedly doubtful over his French aluminium smelter. Gupta had bought the Dunkirk aluminium smelter from Rio Tinto in December 2018, in a deal said to be worth $500m (£375m). But he then fell out with Rio over an outstanding sum that they said it was owed, and are in arbitration now.
The Times reported that the accounts for 2018 for Aluminium France Industries UK, filed at Companies House, already show they are at a breaking point. The same reports also noted that they reportedly breached covenants on a £350m loan used to buy the smelter, while a $115m loan from lenders including BlackRock has an interest rate of 14%.
The accounts said there was “material uncertainty caused by the pandemic on the future funding requirements of the group, which may cast reasonable doubt on the group’s ability to continue as a going concern”.
Covid-19 had forced the company to cut production by 15%, the accounts said, and Gupta had injected $71m into the business via loans. Also, it is in “advanced discussions” with the French state about a €70m (£63m) loan.
