GFG Alliance Strikes Deal for Debt Settlement with Greensill Creditors
GFG Alliance, a global industrial group, has reached a crucial agreement on the commercial terms to settle the debts owed to the creditors of Greensill Capital, which collapsed in March 2021. This settlement marks a key step in GFG’s long-awaited recovery and restructuring process, clearing the financial burden caused by Greensill's collapse and setting the stage for future growth.
The agreement, though subject to a final binding legal contract, will help GFG significantly reduce its debt load, a move that is vital for restoring financial health and sustainability. This will pave the way for GFG to secure longer-term financing, enabling it to invest further in its core operations across multiple international markets, including Australia, the US, the UK, Romania, and Italy.
Strategic Implications for the UK Market
For GFG’s operations in the UK, this agreement means the successful completion of the LIBERTY Speciality Steel UK restructuring plan. This will also unlock fresh capital for these businesses, particularly to lead the decarbonization efforts within the steel industry. It signals a major milestone for GFG in the UK as it looks to bolster its position as a leader in sustainable steel production.
Impact on Australia’s InfraBuild Business
In Australia, the settlement will allow GFG’s InfraBuild business to finalize its financial accounts for FY 2024. Additionally, the agreement supports the infusion of new capital into LIBERTY Primary Metals Australia, including the iconic Whyalla steelworks. The move will provide the necessary liquidity to enhance operations and settle supplier payments, further stabilizing the Australian market.
Tahmoor Coking Coal Mine and Strategic Asset Sale
In a strategic move, GFG has decided to expedite the process of selling part or all of its stake in the Tahmoor Coking Coal mine. This sale aims to generate funds for reinvestment in Whyalla, enabling GFG to catch up with supplier payments and boost liquidity, subject to board approval. This reflects GFG's proactive approach to securing capital and ensuring long-term financial stability.
European Operations and Debt-Free Future
Upon the settlement's completion, GFG’s European businesses will be free of any outstanding debts linked to Greensill Capital. This will open opportunities for refinancing, which could lead to increased production capacity and the potential for future growth across the continent.
Executive Chairman’s Statement
Sanjeev Gupta, the Executive Chairman of GFG Alliance, expressed his relief over the settlement agreement, emphasizing its significance for GFG’s future. “This agreement is a great relief for GFG and all our loyal workforce and suppliers. It will enable us to move forward from the challenges caused by Greensill’s collapse in 2021 and gives us a solid financial foundation for growth. With improvements in our operations and markets, we are confident in securing long-term financing to build on the investments we have already made,” Gupta said.
Key Takeaways:
• GFG Alliance has reached an agreement on the commercial terms for debt settlement with Greensill Capital creditors.
• The settlement, pending final legal agreement, will significantly reduce GFG’s debt and enable future sustainable financing.
• The UK restructuring plan for LIBERTY Speciality Steel UK will be successfully completed, with new capital aimed at decarbonization efforts.
• GFG’s Australian operations, including InfraBuild and LIBERTY Primary Metals Australia, will benefit from the settlement, allowing for the finalization of FY 2024 accounts and reinvestment into key assets like Whyalla steelworks.
• GFG is launching an expedited sale of its stake in the Tahmoor Coking Coal mine to support liquidity and supplier payments.
• The European businesses of GFG will become free from Greensill debt, facilitating refinancing and growth in production.
• GFG Alliance is optimistic about recovery and growth, supported by improved market conditions and investments in key regions.
