Liberty Steel Makes Progress in Securing Australian Business
After a month long break, GFG Alliance has made an official release on current business situation. GFG Alliance said “Most of GFG Alliance’s businesses across its global portfolio are performing well and generating positive cash flows, supported by the operational improvements we’ve made and strong steel, aluminium and iron ore markets. Our Primary Steel and Mining operations in Europe and Australia are booking record profits and we have adequate funding for our current needs. In light of Greensill’s collapse, we are taking prudent steps across our global portfolio to manage resources while we bridge to new financing for our businesses. We are in regular dialogue with our employees, unions, customers, suppliers, and governments to keep them informed and to explore ways we can work together through the current situation. LIBERTY is prudently managing cash across its global operations to ensure it has adequate funding for its current needs while its refinancing is completed. LIBERTY is making good progress with refinancing as LIBERTY Primary Steel and Mining Australia has agreed terms to refinance its Greensill exposure. Record steel prices and LIBERTY’s operational improvement programme have enabled its core businesses to maintain their strong performance since the beginning of the year.”
A GFG spokesperson said: “The new financing is sufficient to pay out Greensill debt in full and to provide on going working capital for the LPMA group, which includes the integrated mining and primary steel business at Whyalla and its coking coalmine at Tahmoor. GFG Alliance is in continuous discussions with multiple financiers on a competitive basis for various parts of its business and is committed to securing sustainable funding solutions to replace funding provided by Greensill.”
According to a report in The Guardian, “Liberty Primary Metals Australia, which includes a mining and steel business in Whyalla and a coalmine at Tahmoor, had agreed a deal to refinance loans previously extended by Greensill. It is understood that the financing has been agreed with San Francisco-based White Oak Global Advisors and could take up to four weeks for the deal to complete.”
The decision could impact on the direction of court action by Citibank, acting on behalf of Credit Suisse, launched in an attempt to wind up two of Mr Gupta's operations OneSteel Manufacturing and Tahmoor Coal.
UK steelworkers’ union Community Operations Director Mr Alasdair McDiarmid said “The development shows that GFG can raise new financing, but it remains to be seen what it means for the UK. Sanjeev Gupta has promised to keep every UK steel plant open but he needs to persuade us he has the plans to accomplish this. Government has a key role to play and must explore all options to keep the businesses out of insolvency.”