GFG Alliance's financial problems and the impact on the operations of steelworks
13.4.2021
Question for written answer E-001981/2021
to the Commission
Rule 138
Tomáš Zdechovský (PPE), Kateřina Konečná (The Left), Evžen Tošenovský (ECR)
In April 2019, the Commission decided that Liberty House, a British company belonging to the global GFG Alliance group, was a suitable buyer for the Ostrava steelworks, which were originally owned by ArcelorMittal. At the time, there were concerns mainly because the acquisition was largely dependent on borrowed money and that the financing could affect the steelworks’ ability to function independently. However, the Commission gave the transaction a positive assessment and concluded that it raised no concerns.
Last month, however, it emerged that GFG Alliance's main creditor, the financial group Greensill, had become insolvent. Long before that, the group's debts had been held by a Credit Suisse fund. The latter then filed for insolvency in early April through Citigroup. There is even speculation that the debtor offered Greensill invoices of unrealised trades that were fabricated as a form of guarantee[1].
As a consequence of GFG Alliance's financial problems, the steel mills under its subsidiary Liberty House (located in the Czech Republic, Romania and France) are experiencing an existential crisis and many thousands of employees are at risk of being made redundant[2].
- 1.Is the Commission currently following this case, and what is its position on it?
- 2.Does the Commission plan to intervene if fraud is proven to have taken place in relation to unrealised trades?