Next, we will try to bring a few explanations regarding the financial activity off GFG Alliance, the corporation that owns SIDEX. They are essential in the understanding of the mechanisms. It is obvious that everything starts from the complicity of some authorities. Which, in turn, provide the necessary money to fulfill the “objectives”. And in the present context, pandemic, it is not very hard to keep a loan of 120 million Euro, granted by the state, away from the public eye. After all, you provide the work capital in a world badly affected by COVID 19. You don’t give the money to the shareholders through dividend, that really is forbidden. But who says there are not other solutions? Nobody.

 

Life is hard… but lying? Easy.

The idea was to blame the pandemic by invoking the bad financial situation of the steel mill, instead of telling the truth. Metallurgy is one of the industrial activities in which the financial cycle can last up to 6 months. In these conditions, finances should be provided by the management, by the shareholder. Just that in the case of GFG Alliance we are talking about a chronical under-financing. Therefore, the pandemic is just an excuse. Gupta Sanjeev intents both to use the loans he was granted to cover/finance his own debts, and to obtain additional funds to finance his own businesses, to the detriment of the steel mill in Galați.

To this end, Greensill Bank Germany was interposed in the relationship with the Romanian State, with the purpose to obtain the loan through Liberty East Europe and not directly through Liberty Galați. Why? Because by involving Greensill Bank Germany, the Greensill investment fund will grant, in turn, a part of the 120 million Euro demanded by Liberty Galați, along with the increase of the exposure (which he already has) on the actives of the steel mill. 

As a conclusion, everything has as purpose the increase of the solvency of GFG Alliance compared to the other international financial institutions. Then, through GFG Alliance, the owner of the steel mill will prepare to give control of Liberty Steel Galați to other entities. A sale in disguise.

 

Public money? Thrown into the blast furnace

What will happen, however, to the loan granted by the Romanian State? Is it lost money or not? The major risk is represented by the fact that in case Liberty Galați will not pay the loan contracted in its entirety, the state will not have anything to foreclose. Because the pledging of the actives of the steel mill in Galați to the benefit of the Greensill Capital investment fund is not mentioned in the documents turned in by the new owner at the Central Deposit of Shares in Romania. Long story short, the actives of Liberty Galați don’t appear to be encumbered. Therefore, you will have nothing to foreclose.

In a future article we will also tell you what can come of the steel mill in Galați. And the people who work there, approximately 5.000. Unfortunately though, Sanjeev Gupta is not interested in SIDEX or in the employees. But only to get rid of the debts that lie at the base of his “empire”.

 

(an article by Pan Themis)