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The French government is seeking €95mn in damages from UK private equity group Greybull, alleging that the fund was responsible for the loss of more than 500 jobs at the Novasco steelmaker it formerly owned.
Greybull took control of Novasco in July 2024 and committed to investing €90mn in keeping the company afloat. Its rescue attempt failed, putting hundreds of roles at risk.
France has alleged that Greybull spent just €1.5mn of the €90mn it had committed as part of its takeover — a failing that ultimately led to the closure of Novasco’s Hagondange plant in north-east France, along with other smaller sites.
Launching legal proceedings at Paris’s court of economic activities on Monday, French industry minister Sébastien Martin said the government was taking action through French courts to “recognise the serious failings and to obtain the damages suffered by the state”.
The French state injected €85mn into the plants, but Martin said that Greybull had not stood by its side of the buyout agreement struck in 2024.
The case comes as Chinese competition weighs on the European steel sector, with governments desperate to save ailing steel companies they deem essential to the continent’s industrial security and competitiveness.
The FT reported last week that Italy was seeking €7bn in damages from ArcelorMittal over alleged “mismanagement” of Europe’s largest steelworks when it was under the company’s control.
Novasco makes specialised steel for the automotive sector in particular. It has been in difficulty for more than a decade and entered administration in November for the fourth time since 2014.
It was bought out by a consortium of investors led by the French medium-sized business Métal Blanc, but only one of its four sites was saved in the deal, protecting 144 jobs out of a total of almost 700.
Greybull has rejected the claims made against it previously, saying that it has stood by its commitments to the site, but that Novasco’s Hagondange site had faced greater challenges than anticipated.
Greybull did not immediately respond to a request for comment.
However, the group has previously faced scrutiny over past investments in the steel sector. It bought the business that would become British Steel from India’s Tata Steel in 2016 for just £1, only for the company to fall into further financial difficulty and collapse into liquidation in 2019.
The first hearings in the legal case will begin on May 7.
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