People of the steel-making town of Whyalla are facing fresh uncertainty amid a push by creditors to break up the Australian empire of British billionaire Sanjeev Gupta, amid fallout from the collapse of a major lender.

People of the steel-making town of Whyalla are facing fresh uncertainty amid a push by creditors to break up the Australian empire of British billionaire Sanjeev Gupta.
Key points:

  • A claim has been filed to wind up Sanjeev Gupta’s Australian operations
  • It comes after the collapse of major lender Greensill
  • Last month, Mr Gupta conceded GFG had been too dependent on Greensill

An application was lodged in the NSW Supreme Court on Tuesday to wind up the operations of two companies, including OneSteel Manufacturing which runs the steelworks, which employs more than 1,200 workers.
The application has been made by Citibank.
There are two defendants in Citibank’s action  the first is OneSteel Manufacturing Pty Ltd (trading as Liberty Primary Steel), and the second is Tahmoor Coal Pty Ltd.
The move comes after the collapse of one of the major lenders to Mr Gupta’s GFG Alliance, Greensill Capital.
Greensill has been placed in the hands of administrators Grant Thornton after global wealth manager Credit Suisse froze $US10 billion ($13.1 billion) worth of investment funds that it relied on.
Citibank filed the action on behalf of Credit Suisse, and it follows a similar application by Citibank in London.
The ABC has requested access to the NSW Supreme Court documents but under NSW rules they are not made publicly available until all parties have filed and the matter has been heard in court at least once.
The defendants are yet to file any documents and the matter is set down for a directions hearing on May 6.
Whyalla’s steelworks was bought by Sanjeev Gupta’s GFG in 2017.(ABC News: Nick Harmsen
In a statement, a GFG Alliance spokesperson said that “any proceedings instituted by Credit Suisse will be vigorously defended”.
“GFG Alliance’s Australian Mining and Primary Steel (MPS) business, which includes OneSteel Manufacturing Pty Ltd and Tahmoor Coal Pty Ltd, does not conduct any financing with Credit Suisse and has not sold receivables to Credit Suisse,” the spokesperson said.
“The Australian businesses are performing well and generating positive cash flow, supported by the operational improvements we’ve made and strong steel and iron ore markets.”
The spokesperson said GFG remained in “constructive discussions” with Greensill’s administrators.
Mr Gupta purchased the Whyalla steelworks in 2017 following months of prolonged uncertainty sparked by steelmaker Arrium entering administration.
Treasurer warns against ‘alarmist conclusions’
South Australia’s Treasurer Rob Lucas said employees of OneSteel “shouldn’t jump to any alarmist conclusions” as it is still very early in the court process. 
“This is not an insignificant event, obviously, but our advice has been this is one further part or element of ongoing financial and legal manoeuvring in relation to what is a very complicated issue,” Mr Lucas said.
“GFG have continued to ensure the market, and the government, that they are confident they’re going to be able to manage a refinancing of their relationship they’ve got with Greensill.
“We can only take them at their word at this particular stage, and we’ll have to wait and see the results of their attempted renegotiation of finance.”
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In a podcast released last week, Mr Gupta conceded GFG had been too financially dependent on Greensill.
But the billionaire was also bullish about the company’s prospects of recovery.
“I’m totally committed to  come out of this, and actually come out stronger,” he said.
“Most of the businesses which are within GFG have seen hardship before, and they have come through that with their own perseverance and their own grit and their willingness not to give up.”
Mr Gupta said there were “no plans to sell any of our core businesses”, and said GFG was now taking “strong, prudent steps” towards recovery.
The treasurer said the company had not sought further financial assistance from the government.
“We’ve had no formal applications,” Mr Lucas said.
“We’ve been told by GFG the same thing they’ve been told that is, that GFG believes their operations are operating profitably and that they are confident of refinancing.”