GFG steel deal with Credit Suisse

ALL SMILES NOW: GFG Alliance Chairman Sanjeev Gupta has struck a deal with Credit Suisse and Greensill to support the company's restructuring plan.
ALL SMILES NOW: GFG Alliance Chairman Sanjeev Gupta has struck a deal with Credit Suisse and Greensill to support the company's restructuring plan.

GFG Alliance has taken a huge stride towards completely refinancing their steelmaking business, which includes the Whyalla Steelworks, striking a deal with Credit Suisse Asset Management (CSAM).

According to a company statement released this morning, the deal will will provide a stable financial platform for the Liberty Primary Metals Australia (LPMA) business and secures a recovery plan for creditors.

This will allow LPMA, which has delivered "record-breaking" performances following continuous improvement initatives and favourable market conditions, to make a "substaintial" upfront payment to Greensill and Credit Suisse.

Greensill, a major lender to British Billionare Sanjeev Gupta's steel and mining empire, recently collapsed into insolvency, putting GFG Alliance at risk of toppling over.

"Under the agreement, which represents the best of several options open to LPMA to achieve refinancing, the balance will be paid in instalments to CSAM and Greensill Bank, through the amended maturity date of June 2023," the company said.

GFG will also make a $50 million into its Liberty Steel UK business to restart the Rotherham electric arc furnace.and provide a platform to refinance the business in full.

Chairman Sanjeev Gupta said his Australian integrated operations were now profitable and performing the best they had for many years.

"The deal we have agreed today provides a stable financial platform for our LPMA business and secures a recovery plan for Credit Suisse Asset Management and Greensill Bank following the collapse of Greensill Capital," he said.

"I'd like to thank all our stakeholders - government, union representatives, customers, suppliers and of course our employees and the local community - for the support= they've shown GFG Alliance as we managed our way through the challenges created by the Greensill collapse.

"I care deeply about this community and remain committed to our long-term vision to transform Whyalla into a modern Greensteel hub."

Mr Gupta said the funding injection into Liberty Steel UK was an important step on the road to creating a sustainable business.

"It will allow time to prove the operations can run efficiently which will enable us to finalise longer debt restructuring," he said.

"The plan highlights the progress we have made since Greensill's collapse and has secured the support of both creditors and unions."