Global steel conglomerate ArcelorMittal (AM) has changed its payment terms to direct cash for steel shipments to Sanjeev Gupta’s GFG Alliance.
According to media reports on Friday, the change stems from the company’s concern over GFG Alliance’s financial situation. Moreover, a change in payment terms may affect GFG Alliance’s cash flows after its primary financier Greensill Capital filed for bankruptcy earlier in March. Greensill’s insolvency is being viewed as a setback for GFG Alliance and its subsidiaries like Liberty Steel.
ArcelorMittal had temporarily suspended its steel deliveries to some of GFG Alliance’s plants, including Liberty Steel, per reports that cited a Mar 12 statement from the steelmaker that it was working closely with Liberty Steel to ensure that their contract continues.