Cleveland-Cliffs Inc. (CLF)

They are there to ride out a storm that threatens to implode not only Gupta's multi-billion-pound business empire, but also the entire British steel industry, risking thousands of jobs and with very expensive ramifications for taxpayers.

Gupta's business, the Gupta Family Group Alliance (GFG), is a network that includes Liberty Steel, Britain's third-largest steel producer and operator of 12 works across the UK.

With unfortunate timing, he has been begging British taxpayers to bail out this business with a £170 million cash injection just as his wife sees fit to revamp the family's multi-million-pound Belgravia mansion.

Why the begging bowl? Because GFG has become entangled in the murky affairs of Greensill Capital, the bank founded by Australian Lex Greenhill, 44, erstwhile friend and boss of former Prime Minister David Cameron.

In February, Greensill Capital collapsed — leaving a gaping hole in the finances of Gupta's British business, Liberty Steel. (Greensill had been Liberty's main lender.)

Gupta has asked UK taxpayers for £170 million to cover operating expenses. But the Government has refused, citing GFG's 'very opaque structure'. Business Secretary Kwasi Kwarteng tartly warned: 'We feel there was no guarantee [the money] would stay in the UK.'

Parliament's business select committee is launching an investigation and the Government is considering 'all options', including nationalisation, to keep Liberty afloat — though unions have warned it is 'far from clear' how this would work.

Greensill's collapse not only threatens Liberty's survival, it has also dragged David Cameron into a very ugly situation.

Cameron once declared that political lobbying was 'the next big scandal waiting to happen', bemoaning 'the far-too-cosy relationship between politics, government, business and money' that has 'tainted our politics'.

Yet, as the Mail has reported, Cameron has been exposed for personally lobbying on behalf of Greensill Capital, for which he was a highly paid adviser and enjoyed share options that — until the bank imploded — stood to enrich him by tens of millions of pounds.

It has been revealed that Cameron texted Chancellor Rishi Sunak begging for Greensill to be given a bigger role in providing Covid bailout loans. Moreover, it has also emerged that, during his time in No. 10, Cameron provided Greensill himself with extensive access to Government, including a bespoke Cabinet Office email address and business card.

Inevitably, this has raised serious questions about fair competition, given that Greensill's company signed contracts with public bodies, including the NHS.

Cameron has been cleared by a lobbying watchdog, but questions persist about his behaviour. He has steadfastly refused to comment.

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But back to Gupta and his dealings with Greensill.

Born in Punjab, India, Sanjeev was the latest in a line of Gupta steel heirs. At 14, he was sent to St Edmund's private school in Canterbury, Kent, and reportedly 'fell in love' with England.

Portentously, he was thrown out of his rooms at Trinity College, Cambridge (where he was studying Economics and Business), after registering a commodities business there in a breach of the University's charitable status.

In 1992, he founded Liberty, which was soon generating revenue of £1 million per day — and from there his empire grew throughout Asia and Africa.

In 2000, he fell in love with his company treasurer, Nicola Crumpton. The couple wed in 2008, and lived in a £1 million penthouse in Marylebone, London, before relocating to the low-tax haven of Dubai, where Gupta's business interests were burgeoning.

Gupta has fondly said of Nicola: 'She used to look after my money; now she spends it.'

The couple returned to Britain in 2015 and continued their acquisitive property spree by purchasing Wyelands, a £3 million Grade-II-listed mansion near Chepstow in Monmouthshire. They also own a £19 million Italianate mansion overlooking Sydney Harbour, as well as a flat and offices in Mayfair next to 5 Hertford Street, the private members' club and watering hole of magnates and politicians.

In 2016, he paid £330 million for a package of acquisitions in the Scottish Highlands, including two power plants, a smelter and 100,000 acres of estate — which includes the foothills of Ben Nevis.

Sanjeev is the fifth-largest private landowner in Britain — much of Ben Nevis, the UK’s tallest mountain, belongs to him. (Ben Nevis, Scotland's highest mountain) +8
Sanjeev is the fifth-largest private landowner in Britain — much of Ben Nevis, the UK's tallest mountain, belongs to him. (Ben Nevis, Scotland's highest mountain)

The tycoon also has a fondness for private jets, one of which, a 2015 Bombardier Global 6000, was put up for sale two years ago for £31 million after Gupta allegedly defaulted on a loan h

To generate a possible SP by year end, several variables need to be defined. EBITDA is just a start. WS reacts to Earnings, not EBITDA, so you have to crunch the numbers, which has lots of pitfalls (line item assumptions). P/E is another challenge. WS sets that based on future expectations. Their not kind to Steel or Minerals. The Table below, with the current SP, clearly shows how WS sees the big 4 Steel Companies:Company---SP-------Est.Earnings---P/ECLF--------17.53--------$2.90--------6.04X-----------21.37--------$3.55--------6.01STLD------50.38--------$6.53--------7.72NUE-------78.74--------$9.85--------7.99To move CLF's SP into the 30's, 40's or 50's, as some here hope, it will take over $6 in earnings and a P/E move to above #$%$ possible!

I have been mulling over this years amazing steel prices. Been following some of the feedback from longs that understand how to run a business and how to project your business. LG for many people that drive negative press on him, because of how he talks on conference calls. Over the years, LG would no matter how bad it is with steel prices he would find something good to say about his strategy and CLF future. This year will be a gift from the gods. All of LG moves will pay off huge. I am expecting that his last report on projections on quarterly and year end numbers are way lower than they will be. I bet they will be 20% higher or maybe 25 %. He is a man of pride ,and a fighter that will take jabs in every round. But at the end he will go for the knock out. Shorts he is coming for you and it will be a damaging hit. I have 45k share and plan on adding an additional 20 K on Monday. I am so so excited to see if this all plays out. I have put a ton of money on LG. Best of luck to all that believe in hard work pays off with a few godly breaks.

Let’s finish the EBITDA guessing game.

First-quarter 2021 adjusted EBITDA* of approximately $500 million.
We know this is based on 4 MT of steel sold If Koci is to be believed on the CC’s.
This does not include any pellets or HBI sold to third parties for obvious reasons including The Soo locks opened March 25, 2021 and its safe to assume they replenished themselves first for pellets and HBI.
Does this include PP data?

Timna & BOA released results from a new survey yesterday. Good current news, but they are still dogging the 2nd half. Even mentions Cliffy.

Demand strength is real

Steel buyers at a “virtual brunch” Thursday agreed demand was very strong, with no
signs of a slowdown and limited pushback to higher prices. Service center and
manufacturer participants said backlogs were near record levels, with strength across
most end markets and more than restocking activity. Some anticipated slowdown in
activity didn’t materialize, but material supplies were a challenge. Buyers did not foresee
risk to demand momentum, and were more concerned about steel availability than price.

Steel still scarce, but supply improving

While availability continued to be a challenge, several steel buyers said they were
recently able to secure more tons and mills were offering maximum quantities again on
min/max contacts. ... Sub-80% reported utilization was a mystery, especially given recent restarts
and new capacity. ... Recent restarts from U.S. Steel’s Gary complex and Cliffs at
Cleveland and Middletown likely were tied up meeting auto contract demand, in our
view. Cliffs may be building slabs ahead of a 45-60-day planned Indiana Harbor East #7
outage in Q2, limiting finished supply near term but smoothing production into Q2.

Imports poised to surge in Q2/Q3

One trader said imports could be headed to a record high (Exhibit 2) even
considering 25% tariffs.

Buyers eye gradual px declines; history says sharp drop

Historically steel prices correct sharply. Current prices are panic driven and a balanced market should be at least $400-$500/t lower, in our view, with imports, restarts and mid-year capacity additions driving a
correction.

Breaking News:

Cleveland-Cliffs will be the largest flat-rolled sheet and plate steel footprint in North America with approximately 16.5mn short tons (st) of combined flat-rolled shipments in 2019. Comparatively, Electric arc furnace (EAF) steelmaker Nucor, the largest shipper of flat-rolled products in 2019, shipped 12.7mn st of sheet and plate products.
Cleveland-Cliffs expects the combined company to more than double its current exposure to the automotive market, from more than 3mn st/yr to over 7mn st/yr.