French Government Seeks Legal Redress Over Greybull Steelmaker Debacle

The French government is preparing to initiate legal proceedings against British private equity firm Greybull Capital following accusations that it failed to honour significant investment pledges for the struggling steel company Novasco. Finance Minister Roland Lescure signalled a resolute stance, stating that France would be uncompromising in its pursuit of accountability after Greybull allegedly did not deliver on commitments tied to a 2024 rescue deal.

Situated in Hagondange in north-east France, Novasco entered administration in August, just a year after Greybull acquired the business. The fate of its seven hundred employees has hung in the balance for months. The agreement had required Greybull to inject ninety million euros into Novasco, matching substantial support from the French government, which provided eighty-five million euros to support the company’s four plants. According to the French finance ministry, Greybull has only contributed 1.5 million euros since the acquisition, leaving Novasco in a precarious position within the automotive supply chain.

As the court considers potential takeover offers for Novasco, staff have been left facing the prospect of significant job losses regardless of the outcome. Minister Lescure, speaking on national television, criticised both Greybull and previous owners, asserting that France does not seek to nationalise industry but expects investors to fulfil their obligations when engaging in rescue transactions. He described Greybull as a rogue buyer, arguing that the promised sums simply do not correspond with the reality of the crisis at hand.

Greybull’s track record features a series of high-profile failures, notably its involvement in British Steel. Acquired from Tata for a nominal sum in 2016, British Steel was the subject of a promised four hundred million pound investment intended to restore its status as a European steel leader. Within three years, the business was under severe strain, requiring a government loan of one hundred and twenty million pounds, which did not prevent its subsequent entry into compulsory liquidation and eventual sale to China’s Jingye Group in 2020. Other Greybull ventures, such as the retailer Comet, convenience chain My Local, Rileys snooker halls, and airline Monarch, similarly ended in corporate demise.

A Greybull spokesperson insisted that the firm had met all obligations as they became due and claimed substantial losses in the process. They attributed the Novasco crisis to unforeseen industrial challenges and described the situation as dramatically worse than presented during the acquisition process. Greybull said it has maintained communication with French authorities and sought collaborative solutions, but was recently informed that the government would pursue alternative options.

France’s intervention in the Greybull Novasco affair underscores persistent questions about the responsibilities of private equity owners and the role of governments when vital national industries come under threat.