The repercussions from the failure of his biggest lender, is now beginning to impact the very business that helped Sanjeev Gupta build a steel empire.
US investment bank Citigroup has filed insolvency proceedings in UK courts against Liberty Commodities, the $4 billion business that Gupta founded in 1992.
UK laws permit creditors to petition insolvency proceedings against a company that owes them money. Citigroup is one of the financial institutions that bought instruments from Greensill Capital, which collapsed and filed for insolvency last month.
Greensill had lent Gupta's GFG Alliance, the parent company of Liberty Steel and Liberty Commodities, over $5 billion over the last few years as he went around building an empire that now encompasses over 30 countries, including India.
But the UK-based billionaire of Indian origin continues to put up a brave front, telling his 35,000 employees in a recent internal podcast that he is "totally committed to come out stronger" from the most "difficult month of my life."
The latest update
Since Greensill filed for bankruptcy, Gupta's businesses have unraveled fast. This is what is happening in several counties.
The government has turned down a request for an emergency loan of 170 million pounds. Sources told Moneycontrol that the government may now lend money only if Liberty Steel, or parts of GFG Alliance agree to file for insolvency. Some from the government have also talked about the possibility of nationalising Liberty's assets in the UK to save 5,000 jobs.
Local administration is investigating 'disappearance of loan' worth $21 million that Greensill Capital had given to Liberty Aluminium Poitou, owned by GFG Alliance. Local reports say that the bank had asked the smelting plant to repay the loan in December, but hasn't done yet.
If proven, this could make it tougher for Liberty Steel to get more funding from the French government, which has already given a 20 million euros loan to Liberty Steel's unit in Ascoval.
Separately, Bloomberg reported that Morgan Stanley and ICBC Standard Bank have put their loans to GFG Alliance's aluminum smelter in Dunkirk, on the block.
While Gupta has been stressing that the Australian assets - among the most valuable for Liberty Steel - won't be impacted by the troubles in Europe, the fear is otherwise.
Rating agency Moody's downgraded Infabuild, probably Liberty's most profitable business in Australia, into junk status fearing a contagion effect. The downgrade came after Greensill registered a 'security interest' over the shares of Infrabuild. The company employs 5,000 people and has an annual revenue of nearly $4 billion.
Liberty's other business in Australia is the Whyalla steelworks in South Australia.
In Germany, regulator BaFin had begun a probe on Greensill's bank. Reports says investigations have already found irregularities, including its financing of Gupta's businesses.
The 'most difficult month'
In a podcast on March 27, addressed to GFG Alliance 35,000 employees across the world, Gupta struck the right notes to calm nerves of a workforce worried about their jobs.
Gupta said he had no plans to sell any assets as has been speculated, and has in fact received "good interest" from institutions to refinance the Group's debt.
Pointing out that the steel, and the overall metals, market is holding on strong, "am very encouraged by the interest from financial community. A lot of people want to refinance our business, I'm confident we will get there, but will take some time," he said.
Gupta, who has been based in Dubai since Christmas, said he has launched Project Athena to save cash in each of the plants. "I have daily calls with each plant and look at steps to conserve cash. We are taking measures such as getting some customers to pay early, reducing inventory levels, getting rid of junk. These measures are yielding results," he said.
Gupta defended ties with Greensill, which he said was the only institute ready to lend him money as he picked loss-making plants across the world. "There were few options available for traditional finance. Greensill was a breath of fresh air. They have innovative ways of raising finance. They supported us...these businesses were almost done, but Greensill came in to restart these business," Gupta said.
Greensill, he added, provided capital against future cash flows.
The entrepreneur said the Group was moving towards diversifying its lenders, especially in the steel business that is most dependent on Greensill. In preparation of accessing 'traditional avenues for capital,' GFG Alliance had consolidated businesses, appointed a board and published annual report. In hindsight, he added, the process should have begun earlier.
The speculation around the 42 million pounds home in London's tony Belgravia district, "pained the family," Gupta said. The family had bought the house after coming back to the UK after living in Wales, Dubai and Australia. Gupta said he and his family contributed towards the equity for the house, and he took a mortgage.
"If it had happened six months later, in the middle of Covid-19, I probably wouldn't have done it,"said Gupta.
The entrepreneur stressed that he has had conversations with government across the world where Liberty has a presence, "and all are willing to help."
That could well be the key in Gupta managing to rescue his steel empire, even as he increasingly seems to be getting squeezed from institutions looking to recover money.