GP Global Group disclosed Monday that it is seeking new investors to help it weather a financial crunch caused by the COVID-19 pandemic and related economic contraction.
The base oil trader and lubricant manufacturer, which is based in Sharjah, United Arab Emirates, said it expects to arrange a cash influx within months, but it declined to discuss its needs or prospects.
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The company also complained that unidentified parties are spreading rumors about its predicament in an attempt to hurt it.
“The group strongly and vehemently denies all such rumors and is being made a victim of blatant lies by spreading of totally false and factually inaccurate information by these vested interests,” the company stated in a press release.
GP is a conglomerate with activities in trading of petroleum products, —–, along with refining, shipping and logistics. It has expanded rapidly in base oils and lubricants the past few years through acquisitions as well as organic growth. In 2018 it acquired Ipol and Mag, lubricant blenders based in India and the U.A.E., respectively, and earlier this year it purchased Grand Petroleum in Nigeria. It is currently building a lubricant blending plant in the Indian state of Gujarat.
In 2017 the company obtained an eight-year $150 million loan that was announced in a statement that alluded to low oil prices.
A wide range of businesses around the world have been hurt by the COVID-19 pandemic as lockdown measures taken to contain the disease have caused economies to contract. Some banks have tightened lending practices, and GP said this contributed to its decision to restructure.
“[W]hile we are constantly seeking finance lines to fund our trade, we were unable to get full support from a few financial institutions recently,” the company said in its press release.
The company said some of the rumors being spread report disruptions at its terminals in Hamriyrah and Fujairah, U.A.E., but it insisted that the rumors are groundless and that those facilities are operating as normal.