Private Equity Firm AIP Buys Debt on Gupta’s Aluminum Plants

American Industrial Partners has bought most of the senior debt of two of Sanjeev Gupta’s European aluminum assets, putting it in position to take them over, people familiar with the matter said.

The New York-based private equity firm in recent days bought debt linked to Gupta’s Dunkirk smelter in France as well as refinancing the senior debt of the Duffel rolling mill in Belgium, said the people, who asked not to be identified as the deals weren’t public.

Gupta has been searching for new financing as the industrialist scrambles to save his metals empire after the collapse of its biggest lender, Greensill Capital, last month. AIP’s move to buy out other creditors at par could signal its intention to purchase the aluminum assets -- either directly from Gupta or after an insolvency process.

Gupta’s GFG Alliance, a loose group of metals and commodity trading companies, warned in February it would face insolvency without Greensill’s funding, according to court documents. Its aluminum assets are grouped under the name Alvance.

“GFG Alliance can confirm Alvance Aluminium Duffel is enjoying the benefits of recent strong aluminum markets and its excellent relationships with customers. We have now completed the refinancing of its external debt facilities, with a large international lender, which will position the business for continued growth,” a spokesperson for GFG said, without elaborating.

The GFG spokesperson declined to comment on Dunkirk and potential talks to sell the plants. Representatives for AIP didn’t immediately reply to calls and emails seeking comment.