Sanjeev Gupta’s GFG Alliance has announced debt restructuring and a Â£ 50million investment in UK production.
An update from the struggling steelmaking group explained that following the creation of Liberty Steel’s restructuring and transformation committee in May, “sustained progress has been made to date.”
Concretely, the group has agreed to a restructuring of the debt of Liberty Primary Metals Australia with Credit Suisse Asset Management, while a capital injection will allow production to be relaunched at its Rotherham site.
The funds have been allocated through a new separate legal entity Liberty Capital and are designed to allow time to prove operations can operate effectively and to finalize longer term debt restructuring.
The update also claimed that European and American companies “continue to perform well”.
GFG is a collection of global companies and investments owned by Executive Chairman Sanjeev Gupta and his family.
It is structured around three main industrial pillars: Liberty Steel Group, Alvance Aluminum Group and SIMEC Energy Group, employing around 35,000 people in 10 countries, with a turnover of around 20 billion dollars.
Liberty Steel has 12 steel and aluminum plants in the UK, directly employing around 5,000 workers, but supporting thousands more in the supply chain.
Scottish operations – which were not specifically mentioned in the update – include steelworks at Motherwell and Clydebank, as well as a smelter near Fort William.
Jeffrey S. Stein, Director of Restructuring, said: âThe funding we are providing to Liberty Steel UK puts it in a strong position for business transformation and debt restructuring – the next step in our refinancing. worldwide will be in Europe, where a significant number of new lenders are expressing their interest in refinancing our steel assets.
Jeffrey Kabel, Chief Transformation Officer, said: âThe Â£ 50million infusion of shareholder funds into Liberty Steel UK is an important step in our restructuring and transformation – it will help create lasting value, ensure Liberty has the ability to raise and deploy capital rapidly in the UK and enable our businesses to demonstrate their potential and accept long-term debt restructuring.
Gupta said: âI would like to thank all of our stakeholders – the government, union representatives, customers, suppliers and of course our employees and the local community – for the support they have shown to GFG Alliance as we overcame the challenges created. by the collapse of Greensill.
The future of Liberty Steel is still the subject of speculation, after specialist bank Greensill Capital took office earlier this year as questions were asked about the role played by former Prime Minister David Cameron in seeking UK government support.
Unions and Labor politicians called on the UK government to save the company, but ministers feared they could not get assurances that all support would stay in the UK.
GFG faces an investigation from the Serious Fraud Office regarding its funding agreements.
Gupta added: âAt the same time, the injection of funds from GFG to restart the operations of Liberty Steel UK is an important step on our path towards creating a sustainable UK business.
âLiberty is more convinced than ever that its GreenSteel strategy is the way to reinvent the UK steel industry for a sustainable future.
âHuge progress has been made since March and we are on track to deliver a refinanced and refocused business capable of delivering our vision and creating value for all of our stakeholders. “
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