GFG Alliance issues update on restructuring and refinancing progress

on 19 April 2022

  • LIBERTY Steel USA secures US$125mn refinancing through Eclipse Business Capital
  • New leadership structure to enhance governance and simplify operating model
  • Strong commodity markets help to offset impact of high energy costs

LIBERTY Steel Group’s Restructuring and Transformation Committee (RTC) today reports on the continuing developments across the Group and the sustained progress achieved to date.

Jeffrey Stein, Chief Restructuring Officer, said: “The refinancing of our LIBERTY Steel USA business is further confirmation of rising confidence in our restructuring plan, our GREENSTEEL transformation strategy and the quality of our U.S. operations. The strength of our international asset base is supporting our efforts to stabilise, refocus and refinance our operations, which are gaining momentum. 

At the same time, we are making significant progress in evolving our corporate governance structures, in line with our commitment to increase transparency and accountability. Our new structure will support more effective decision-making and robust systems and processes and position the group to thrive and generate quality jobs in the years to come.

We’re also taking the necessary steps to close or divest non-core businesses. Businesses that are not viable due to changed market conditions have either been sold or closed. However, for high potential but non-core businesses such as our super alloys speciality steel division in the UK, we are restructuring them to make them leaner and more competitive, and also looking for new owners or partners for such businesses who will be specialized and focused shareholders creating sustainable value and preserving high quality jobs.” 

Actions taken

US

  • LIBERTY Steel USA has successfully refinanced its US$125m Asset Based Loan (ABL) with Eclipse Business Capital, another significant step forward in GFG Alliance’s programme to refinance its international operations. The refinancing highlights the competitive advantage of LIBERTY Steel USA’s integrated steel model and strong position it holds in its core automotive, construction, agriculture and consumer markets.

LIBERTY’s model enables its upstream plant in Peoria, Illinois to run at higher capacity utilisation, and provide lower cost, efficient supply for its downstream operations. The success of this framework, and the market agility it creates, has laid the platform for LIBERTY to reinvest in its facilities so it can develop and leverage its best in class market brands such as Red Brand fencing. 

Group

  • LIBERTY Steel Group has implemented a new organisational model to improve governance, accountability and decision making which includes delegated authority from the shareholder to regional presidents. 
  • GFG has appointed global steel industry executive Sandip Biswas as its Group Chief Investment Officer responsible for commercial performance, investment strategy and delivering the group’s carbon neutrality goals. 

UK 

  • LIBERTY Steel UK on April 8 launched a consultation with its employees and unions to restructure its super alloys speciality Steel division to enhance their productivity and competitiveness ahead of a possible sale or JV. This is anticipated to result in a net reduction of approximately 50 roles after factoring in new and vacant roles at its nearby GREENSTEEL operation in Rotherham fuelled by new investment and volume growth.

Europe

  • The Group has set up a dedicated central team who are closely monitoring the situation in Ukraine to ensure our contingency plans remain effective. That team, working closely with local management, continues to focus on ensuring the resilience of our supply chain as well as working closely with our customers. 
  • The Commercial Court in Belgium on April 13 ruled that administrators should be appointed to LIBERTY Liege due to negative equity. GFG is disappointed by the ruling, as under international IFRS standards Liege does not have negative equity, and it is only by marking all fixed assets of the company to near zero under Belgian GAP that this technical provision of negative equity has been derived.  Nonetheless GFG will implement immediate remedies in consultation with the administrators, including recapitalization of the balance sheet, and appeal to the Belgium courts to restore the business to normalcy. GFG continues to believe strongly in its transformation plans for Liege, which will provide the business with a long term, sustainable future preserving 650 quality jobs.

Leadership structure and Governance 

Since the collapse of Greensill in March last year, GFG has been focused on two key strategies: to stabilise, refocus and refinance its operations; and to accelerate the evolution of its corporate structures and governance. The first strategy was kick-started with the creation of the RTC in May 2021 which has led to significant progress since then.

Today GFG can announce a significant step in the evolution of the structure and operating model of the group and LIBERTY Steel Group (LIBERTY). There will be a significant restructuring of LIBERTY’s management operation, which will allow GFG to move forward and mature as an organisation. This follows on from the appointment of Iain Hunter as Chief Governance Officer in May 2021 and the subsequent development of a new organisational structure for LSUK. 

  • LIBERTY today also announces a new management structure, which will see it simplify and formalise the organisation of its senior management team. The new structure will clarify roles and responsibilities, create simpler reporting lines, better enable value creation and protection, and provide more robust systems and processes.
  • To enhance operational governance, LIBERTY has appointed regional Presidents who will have Delegation of Authority (DOA) to represent LIBERTY’s shareholder in their given countries or regions and to serve on local boards. The new Presidents are listed below, with further appointments to be made in due course:
    • Ajay Aggarwal (currently GFG’s Executive Director for Central, Eastern & Southern Europe) – President, Europe 
    • Jeffrey Kabel (currently Chief Transformation Officer) – President, UK
    • Dak Patel – President, Australia & US (current)
    • Paul Francis – President, Middle East
    • Mehmet Coruh – President, Turkey
  • The Presidents will work alongside Group CEOs who will lead operations and performance across their regions and divisions. Group Functions (HR, Finance, IT etc.) will be centralised in Dubai Head Office and operate under a matrix reporting structure to ensure efficiency of resource and improve accountability. 
  • Strategic decision making will be reviewed and approved by a range of governance bodies which sit under the LIBERTY Steel Group Board. They include the Restructuring & Transformation Committee, the Presidents’ Forum, Audit & Risk Committee, and the Environmental, Social and Governance (ESG) Committee. Only Presidents, Group CEOs and select Functions will report to Sanjeev Gupta, Executive Chairman, reducing his direct reports and allowing him to focus on the Group’s strategic objectives.  

Regional updates

Australia 

  • LIBERTY Bell Bay in Tasmania, one of the word’s greenest ferro alloy producers, was formally inaugurated this month. Following significant investment to repair and restart the smelter’s fourth arc furnace, the site is now performing very well with sales of its alloys improved by 18%. The continued operation of the site has secured the future of 250 high quality Tasmanian jobs. 
  • In a keynote address to the American Chamber of Commerce in Adelaide on 7th April, Sanjeev Gupta unveiled the first phase of the Whyalla plant’s magnetite expansion project, which will increase magnetite concentrate production to 2.5Mtpa, providing a key building block for Liberty’s GREENSTEEL transformation plans. The speech underlined the strategic importance of Australia in leading the global hydrogen revolution and the renewed importance of domestic manufacturing capability and sustainable supply chains. 

Europe 

  • LIBERTY Galati, the largest integrated steel producer in Romania, has reported its strongest annual production levels since 2010, with its Blast Furnace No. 5 achieving 2.1 million tonnes of hot metal, the highest production level since its installation in 1978. The business reported a total production volume of 2.35 million tonnes in 2021, due to a range of operational and management efficiency improvements, and continues to increase its production level while transforming LIBERTY Galati into a low carbon GREENSTEEL producer.
  •  LIBERTY Częstochowa has made further progress in its ambition of becoming Poland’s only producer of carbon neutral GREENSTEEL plate with the installation of a 450 kilowatt solar farm on its site. The planning for a second solar farm, which once completed later in the year will provide the plant with around 3 MW of renewable energy capacity, is already underway.

Outlook

In response to the progress achieved by the RTC, Sanjeev Gupta, Executive Chairman of GFG Alliance, commented: 

“As GFG moves forward with its refinancing and transformation, including today’s announcement of a significant refinancing in the United States, the Group is putting in place the right leadership and governance structures to ensure its long-term strength and health. Our new evolved corporate structure will ensure sound and effective decision-making. It will also enable me to focus more on the strategic objectives of the group, particularly our financial restructuring and transformative CN30 ambition, while my senior management teams drive our operations forward to continued success.”

Further information from:

Andrew Mitchell
Head of Communications – UK
GFG Alliance  		+44 7516 029522andrew.mitchell@gfgalliance.com
Patrick Toyne-Sewell Head of Communications – Europe  +44 7767 498195patrick.toyne-sewell@gfgalliance.com

GFG Foundation launches in Bell Bay

on 6 April 2022

  • GFG Foundation launches in Tasmania, extending the Australian footprint of the registered charity which aims to inspire the next generation to potential careers in industry

  • 30 high school children will be involved in the program which is delivered through a partnership with the Princes Trust and educational provider CSIRO.

  • The launch occurred at a formal inauguration of LIBERTY Bell Bay

    • Sanjeev Gupta, Executive Chairman of the GFG Alliance, today celebrated the launch of the GFG Foundation in Tasmania.

    In front of employees and invited special guests at LIBERTY Bell Bay, one of the world’s greenest ferro alloy producers, Sanjeev announced the GFG Foundation’s expansion into Tasmania.

    Thirty children, from Years 9 and 10, from Port Dalrymple School and Star of the Sea Catholic College, will be involved in the program which will run during Terms 3 and 4.

    Speaking about the GFG Foundation’s launch in Tasmania, Sanjeev Gupta, Chairman on the GFG Alliance and Founder of the GFG Foundation, said:

    “Nicola and I started the Foundation in the UK to give something back to the local communities in which we have a business presence. We expanded this throughout Australia – at first in Whyalla and last year to Newcastle.

    “It’s about educating and inspiring young people in our communities, providing an insight into industry through real-world experiences and with the support of our employees who act as mentors. The program helps to nurture our innovators and entrepreneurs of the future.

    “We launched the Foundation in Romania last year and we have aspirations to grow the Foundation further. We’re very excited that Tasmania now joins our Foundation family.”

    The GFG Foundation is a registered charity, which was founded by Sanjeev and his wife Nicola in the UK in 2017 before its expansion into Australia in 2019. Their vision is to develop educational programmes, through the GFG Foundation, to give young people an insight into industry via real-world experiences, whilst developing confidence, communication, and interpersonal skills. The Foundation works with education partners to help thousands of young people through science, technology, engineering, and mathematics (STEM) and enterprise skills development, as well as inspiring students by showcasing opportunities in their community.

    The program in Australia is delivered through a partnership with the Princes Trust and educational partner and provider, the CSIRO.

    Richard Curtis, Managing Director of LIBERTY Bell Bay, said:

    “We’re delighted Sanjeev and his family could be here with us at LIBERTY Bell Bay and our team is excited to be involved in delivering the Foundation’s worthwhile program.

    “We’ve seen the growth and results at Whyalla and Newcastle and the team here is looking forward to bringing opportunities to students here in George Town, to explore and consider future possible career pathways through their involvement in this program.”

    The GFG Foundation launch in Tasmania was announced at a formal inauguration ceremony held today at the LIBERTY Bell Bay site to officially welcome the team to the GFG Alliance. The event, initially planned to occur shortly after the completion of acquisition by GFG in early 2021, has been delayed and postponed due to the COVID-19 pandemic, travel restrictions and border closures.

    “I am very excited to be here in Tasmania, with my family, and finally be able to formally welcome the Bell Bay team into the GFG family,” Sanjeev said.

    GFG Alliance appoints top industry executive Sandip Biswas as Group Chief Investment Officer

    on 31 March 2022

    GFG Alliance has appointed global steel industry executive Mr Sandip Biswas as Group Chief Investment Officer, as the group further strengthens its management team globally.

    Sandip will be responsible for delivering sustained commercial and investment performance, playing a key role in supporting the group’s debt restructuring and transformation plans, areas in which he has deep expertise. Sandip will be responsible for leading GFG’s efforts to become carbon neutral by 2030 (CN30), applying his strong track record in developing decarbonisation projects.  

    Sandip joins from Tata Steel where for seventeen years he held senior and board level positions in its important JVs and subsidiaries, including Group Executive Vice President, Finance, for Tata Steel Limited, where he oversaw the group’s financing strategies, including capital structure, mergers and acquisitions and capital raising activities.  In July 2019 Sandip became Tata Steel Europe’s Executive Director responsible for driving the company’s transformation programme and was appointed to the board.  Most recently Sandip was the Chairman of Tata Steel UK. 

    Sandip has sat on the boards of companies across various geographies in South East Asia, India, Africa, Europe and Canada spanning across port, shipping, coal and iron ore mining and steel industries. Sandip is an honours graduate in commerce from Calcutta University, a member of the Institute of Chartered Accountants of India and of the Institute of Company Secretaries of India.

    Sandip brings with him a deep appreciation of the links between industry, society and the environment, core to GFG’s purpose to create a sustainable future for industry and society. He takes up his position as Group Chief Investment Officer on April 1.

    Commenting on his appointment Sandip Biswas said: “GFG’s growth trajectory and the group’s focus on GREENSTEEL transformation puts it in a unique position in our industry. The group has some excellent assets across the world which are performing exceptionally well and provide a solid platform for success.  The next few years will be formative for the group as it completes its restructuring and transformation, and I’m excited by the opportunity to play a key part in the journey, especially its GREENSTEEL and CN30 missions.”

    Sanjeev Gupta, Executive Chairman, GFG Alliance said: “Sandip is a top-notch global steel executive of the highest calibre. Sandip’s deep experience as a financial strategist, and his expertise in major steel decarbonisation projects will be crucial to our future success as we put the business on a path for sustainable long-term growth. I’m delighted Sandip is joining us and I look forward to working with him in delivering GFG’s commitment to a sustainable future and the GREENSTEEL transformation.”

    GFG Alliance issues update on restructuring and refinancing progress

    on 7 March 2022

    • Significant progress with creditors including withdrawal of petitions by U.K. HMRC
    • Further funding injected into LIBERTY Steel UK to secure continued operations
    • Continued progress to restructure the Group to focus on its core businesses
    • Strong international steel and aluminium markets have supported robust performance

    LIBERTY Steel Group’s Restructuring and Transformation Committee (RTC) today reports on the continuing developments across the Group and the sustained progress achieved to date.


    Jeffrey Kabel, Chief Transformation Officer, said: “We’re pleased to report good further progress in our negotiations with creditors including U.K’s HMRC. We are committed to repaying all creditors and this is an important step in enabling us to restructure and achieve long-term refinancing.


    Our core international businesses have continued to generate strong returns and achieve record production levels despite the sky-high energy costs facing energy-intensive industries across the U.K and Europe. We will continue to progress our efforts to refocus and refinance our operations for the long-term.”

    Actions taken

    UK

    • Following positive discussions with HMRC winding up petitions have been withdrawn. In parallel, constructive discussions continue with existing creditors to repay liabilities and with new lenders over longer term refinancing of the business.
    • Following the £50m injection of shareholder funding to restart operations at LIBERTY Steel UK (LSUK) in October, a further significant injection of shareholder capital has enabled renewed steel making across LSUK’s High Value Manufacturing, Narrow Strip, Engineering Bar and Merchant Bar operations. The campaigns, which will extend into March and April, will enable LSUK to serve customers and maintain market position.
    • Following the announcement in May 2021 that GFG Alliance would be divesting LIBERTY Pressing Solutions Coventry (LPSC) the Group has actively been seeking potential buyers for the business. LPSC has continued to fulfil customer orders through this period, during which operations were funded through shareholder capital. The structural long-term downturn in the UK automotive market has meant that it has not been possible to find a buyer for LPSC, and as a result a formal consultation opened on March 7.

    Australia

    • The South Australian government has announced funding guidelines to co-finance operational efficiency projects at LIBERTY Primary Metals Australia’s (LPMA) integrated steelworks at Whyalla. It is the first step in releasing a AUS$ 50 million grant that will fund approved projects to improve Whyalla’s productivity and efficiency, to be matched on a “dollar for dollar” basis by LPMA. LPMA is working to advance strategic upgrade project proposals that qualify for government funding. The proposed grant is in addition to significant investment LPMA has already made in plant and equipment at Whyalla where an operational efficiency drive, continuous improvement initiatives and favourable market conditions have improved performance.

    Regional updates

    Australia

    • Since the October 2021 announcement of a debt restructuring for LPMA, the integrated operations have continued to demonstrate strong performance, despite a surge in energy prices. This included a threefold increase of coal washed production and an 82% increase in sales at Tahmoor; a 12% increase in iron ore sales to 2079kt; a 17% increase in steel production at Whyalla and an 18% rise in alloy sales at LIBERTY Bell Bay. This week the Australian Government awarded a $A292million rail contract to the Whyalla Steelworks to supply 147,000 tonnes of rail to complete the Inland Rail project. InfraBuild has recorded continued improvement across all financial metrics in its H1 FY22 results and its best half year safety performance on record. Compared to H1 FY21, InfraBuild’s net revenue is up 41% to $A2.94B, with EBITDA up 109% to $A314M. InfraBuild posted a record Total Recordable Injury Frequency Rate (TRIFR) and Days Away, Restricted, or Transferred (DART) improvements for the period between July and December. In the last quarter, TRIFR was 32% better and DART 51% better than the corresponding period.

    Europe

    • LIBERTY Ostrava in the Czech Republic has started an extensive two year programme of modifications to its Steckel hot strip mill, costing around EUR 40 million. This will reinforce reliability and product quality, while increasing capacity utilisation to more than 1 million tonnes of flat products a year. Ostrava’s tube plant also expects to hire more than one hundred new skilled workers this year to support its drive to increase the production of seamless pipes aimed at the US oil drilling and transport markets.
    • LIBERTY Galati in Romania has invested EUR 5.5 million in strengthening its Hot Rolled Coils production line to increase productivity of the mill and improve its environmental performance.
    • LIBERTY Częstochowa, Poland’s only producer of low-carbon GREENSTEEL plate, has started the renovation of its two cutting lines, crucial for the successful realisation of its new “55-65-85” production strategy which initially aims to achieve the shipment of 55,000 tons of steel plate per month.
    • LIBERTY Magona, Italy’s leader in galvanized and pre-painted flat rolled coils production, is planning to achieve a capacity increase of more than 20% this year. The expansion is expected to come from the addition of new capacity for painting production and a new range of galvanized and pre-painted products, supported by enhanced customer service and broader international sales network. LIBERTY Skopje in North Macedonia is also planning to increase its production to around 20,000 tonnes a month, up by 65% through operational and planning efficiencies.

    United Kingdom

    • Steelmaking at Rotherham and Stocksbridge has continued over the first quarter of the year following the injection of shareholder funding that enabled the restart of operations in October. A steelmaking campaign in February met planned production targets, and another has been underway during early March. Planning is advancing well for further campaigns.
    • The Aluminium Stewardship Initiative has awarded ALVANCE British Aluminium’s Lochaber smelter an ASI Performance Standard certification, considered to be the gold standard for sustainable production in the industry.

    United States

    • LIBERTY Steel USA has successfully restarted production at its rod mill in Georgetown, South Carolina, which was closed during the Covid-19 Pandemic. 65 employees have now been able to return back to work. LIBERTY Steel USA has also implemented efficiencies such as utility cost savings, rental equipment return and contractor reductions to improve its profitability and develop a sustainable long-term plan for the plant.
    • LIBERTY Steel & Wire has restarted production at its wire rod mill in Peoria, Illinois, following installation and testing of a new transformer for its electric arc furnace. The Peoria mill is the largest single location rod mill in the US.

    Outlook


    In response to the progress achieved by the RTC, Sanjeev Gupta, Executive Chairman of GFG Alliance, commented:


    “With refinancing initiatives well underway and our businesses performing well, this will be a formative year for our organisation as we work through our transformation plan. As our restructuring and refinancing programmes continue to progress positively we are also making operational improvements to further enhance the performance of our core businesses against a backdrop of robust demand for our products.”

    Further information from:

    Andrew Mitchell
    Head of Communications – UK
    GFG Alliance      		+44 7516 029522andrew.mitchell@gfgalliance.com
    Patrick Toyne-Sewell Head of Communications – Europe  +44 7767 498195patrick.toyne-sewell@gfgalliance.com

    GFG Alliance makes major step forward in European industrial relations

    on 12 November 2021

    • European Works Council Agreement covers 18,000 GFG Alliance employees in ten European countries, including the UK and North Macedonia.
    • Central pillar of GFG‘s strategic commitment to embrace positive social dialogue

    Sanjeev Gupta, Executive Chairman of GFG Alliance and Denise Timns, GFG‘s Chief HR Officer, have signed the GFG Alliance European Works Council Agreement, which has been negotiated with the Special Negotiation Body of employee representatives from across Europe. The Agreement is a huge step forward in GFG Alliance’s Industrial Relations and will be a central pillar of its strategic commitment to embrace positive social dialogue on a European level.

    The creation of a European Works Council (EWC), which is a formal consultative and information body, will help GFG continue to build a positive social dialogue between its management teams and trade unions across Europe. The new EWC Council, which will meet twice a year, will be made up of members who represent more than 18,000 GFG Alliance employees in ten European countries, including the UK and North Macedonia. The EWC will give GFG the best possible opportunity to achieve its business goals based on mutual trust, respect and mutual gain and is aligned with GFG‘s social dialogue policies.

    The Agreement has been developed, facilitated by Industrial Europe, to be in line with the European Directive 2009/38/EC of the European Parliament and its transposition into Czech Labour Code nb 262/2006 CL. It is also in the spirit of the European Commission’s Community Charter of the Fundamental Rights of Workers. It will be available in eight languages (Czech, Dutch, English, French, Italian, North Macedonian, Polish and Romanian) to ensure it is accessible to employees across all of GFG’s European businesses.

    Denise Timns, Chief HR Officer of GFG Alliance, said: “I would like to thank all of those on the Special Negotiation Body and at Industriall Europe who have worked so closely with us to bring this important Agreement to life. I look forward to meeting with the EWC to inform and consult with them in a collaborative way about pan-European issues which might impact our businesses and our employees. I’m looking forward to us all benefiting from the Council’s commitment and collective wisdom as we transform the group into a carbon neutral producer of GREENSTEEL and GREENALUMINIUM.”

    Further information from:

    Andrew Mitchell
    Head of Communications – UK
    GFG Alliance      		+44 7516 029522andrew.mitchell@gfgalliance.com
    Patrick Toyne-Sewell Head of Communications – Europe  +44 7767 498195patrick.toyne-sewell@gfgalliance.com

    Note to the editors:

    GFG Alliance is a collection of global businesses and investments owned by Sanjeev Gupta and his family. The Alliance is structured into three core industrial pillars; LIBERTY Steel Group, ALVANCE Aluminium Group and SIMEC Energy Group, independent of each other yet united through shared values and a purpose to create a sustainable future for industry and society. GFG Alliance employs 35,000 people, across 10 countries and has revenues of USD $20bn. GFG Alliance is a leader in sustainable industry with a mission to become Carbon Neutral by 2030 (CN30).   www.gfgalliance.com

    GFG Alliance appoints Toker Ozcan to lead GREENSTEEL EMEA drive

    on 8 November 2021

    GFG Alliance today announces the appointment of Toker Ozcan as CEO, GREENSTEEL EMEA for LIBERTY Steel Group, as LIBERTY further strengthens its international management team to lead the global transition to zero carbon steel.

    Mr Ozcan, who brings thirty years of experience in metals and mining, will oversee GFG’s GREENSTEEL operations in the UK, Poland, India, and lead the Group’s downstream operations in Europe.

    Toker Ozcan is a steel industry veteran with thirty years of experience in metals and mining having served as CEO and Chairman of the Board at Turkish steel giant Oyak Mining & Metallurgy (including Erdemir and Isdemir) from 2018-2021, as well as various other Chairmanships and senior positions throughout his career.

    The appointment further enhances the operating structure for LIBERTY Steel Group – integrated as a single corporate entity with independent board directors since 2020 – to ensure accountability across its steel operations while maintaining agile decision-making.

    Paramjit Kahlon, continues in his role as CEO Primary Steel & Mining, incorporating LIBERTY Steel Group’s operations in Galati, Ostrava, Whyalla & Tahmoor.

    LIBERTY Steel Group continues to perform well and its global restructuring efforts have enabled the refinancing of GFG’s Australian primary steel operations and laid the foundations to achieve secure financing across the Group.

    Sanjeev Gupta, Executive Chairman, LIBERTY Steel Group, said: “Toker is an exceptionally talented and experienced leader, I’m delighted to welcome him to LIBERTY Steel Group as we drive forward with our global refinancing and GREENSTEEL ambitions.”

    Toker Ozcan, CEO, GREENSTEEL EMEA for LIBERTY Steel Group said: “I believe deeply in Sanjeev’s vision for GREENSTEEL and I’m very happy to be joining LIBERTY Steel Group to apply my experience in pushing forward our plans to create a sustainable future for our businesses economically, socially and environmentally.”

    Further information from:

    Andrew Mitchell Head of Communications – UK, GFG Alliance
    +44 (0) 7516 029 522
    andrew.mitchell@gfgalliance.com

    Note to the editors:

    GFG Alliance is a collection of global businesses and investments owned by Sanjeev Gupta and his family. The Alliance is structured into three core industrial pillars; LIBERTY Steel Group, ALVANCE Aluminium Group and SIMEC Energy Group, independent of each other yet united through shared values and a purpose to create a sustainable future for industry and society. GFG Alliance employs 35,000 people, across 10 countries and has revenues of USD $20bn. GFG Alliance is a leader in sustainable industry with a mission to become Carbon Neutral by 2030 (CN30).

    GFG Alliance launches policy partnerships at COP26 to drive GREENSTEEL transition

    on 4 November 2021

    • GFG Alliance partners with three leading research groups to drive sustained change in the UK steel sector
    • Research from Green Alliance, the University of Sheffield AMRC and Bright Blue to underpin push for GREENSTEEL
    • Programme of activity into 2022 to build out investment case for decarbonisation of steel production

    Sustainable industry leader GFG Alliance (GFG), owner of LIBERTY Steel Group, has today announced the launch of a major new three-way policy partnership with thought-leading organisations in the spheres of environment, manufacturing and policy-making.

    GFG’s partnership with Green Alliance, the University of Sheffield Advanced Manufacturing Research Centre and Bright Blue comes during the COP26 summit in Glasgow, where the three organisations will set out thinking on policies required to develop a sustainable future for UK steel and embed investor support for the decarbonisation of steel production.

    GFG Alliance, a lead sponsor of the World Climate Summit, has for over a decade led the debate on the need for transition to GREENSTEEL. LIBERTY Steel UK operates electric arc furnaces at its Rotherham site which recycle steel scrap instead of producing steel from coal and iron ore. Electric arc furnaces produce only a tenth of the direct emissions compared with traditional blast furnace operations but are highly electro-intensive.  With a rapidly decarbonising energy grid the UK has a significant opportunity to lead the GREENSTEEL transformation by recycling steel with renewable power,

    The partnership is being launched with a ‘Prospectus for GREENSTEEL’, in which the three organisations highlight the role that steel making and products made from steel can play in the drive to net-zero, and with a competitive operating environment and the right policy incentives in place.

    GFG Alliance Executive Chairman Sanjeev Gupta said:

    “The UK steel sector has been under enormous strain in recent years due to competitiveness issues and a lack of investment, yet the chance to show leadership and innovation in GREENSTEEL is now there to be grasped.

    “Steel can be at the heart of our collective transition to a net-zero world. To achieve this the industry must change how steel is made. The case for decarbonised technologies – electric arc furnaces and in time hydrogen – is overwhelming.

    “Clear thought and commitment from policy-makers and business leaders is needed to unlock investment in decarbonising steel production. Our partnership with Green Alliance, the University of Sheffield Advanced Manufacturing Research Centre and Bright Blue will tap into their environmental, operational and economic expertise to make the case for change until it becomes a reality.”

    Green Alliance is an independent think tank and charity focused on ambitious leadership for the environment. The project will be led by Policy Director, Dustin Benton and Deputy Policy Director, Roz Bulleid.

    Green Alliance Executive Director, Shaun Spiers, said:

    “Early investment in renewables a decade ago turned a profit for investors, cut consumer bills, and turned coal power plants into stranded assets. New technology and policy means the steel sector is in for a similar transition this decade: rapid scaling up of clean steel will secure the jobs of steel workers and undermine the economics of high carbon laggards. We are delighted to join forces to accelerate the transition.”

    The University of Sheffield Advanced Manufacturing Research Centre (AMRC) is a network of world-leading research and innovation centres working with manufacturing companies around the globe. This activity will draw on the expertise of a range of specialists at the AMRC, across the University of Sheffield and its wider academic network. It will be led by Senior Research Fellow Dr Peter Osborne.

    AMRC CEO, Steve Foxley, said:

    “A net zero future for our planet requires a sustainable steel industry and it is essential that innovation is at its heart. Collectively, we must find a new way of producing steel that both meets the demands of manufacturers and protects the environment; decarbonising the steel sector is critical to making this a possibility.”

    Bright Blue is an independent think tank for liberal conservatism, which seeks to defend and improve liberal society. The partnership work will be led by Senior Research Fellow Patrick Hall and Associate Fellow, Wilf Lytton.

    Wilf Lytton, an Associate Fellow at Bright Blue, said:

    “Green steel is an indispensable building block of the net-zero future we are heading towards, and the UK’s steelmakers can play a leading role in producing it. Bright Blue’s vision is for the UK to become home to the world’s first zero-emissions steel industry, securing skilled jobs and investment in manufacturing.

    “With much at stake and a narrowing window in which to grasp this opportunity, now is the time to set a clear policy direction that will determine the shape of the industry for decades to come and give steelmakers confidence to make long-term investments in their UK operations.”

    Following the launch of the prospectus, a high-level roundtable event ‘GREENSTEEL: the foundation of a new net-zero economy’, will take place on Sunday 7th November, 15:00-16:00 at the Hilton Glasgow, 1 William Street.

    Download our GREENSTEEL prospectus here

    Further information from:

    Andrew Mitchell Head of Communications – UK, GFG Alliance+44 7516 029 522andrew.mitchell@gfgalliance.com
    Patrick Toyne-Sewell Head of Communications – Europe, GFG Alliance+44 7767 498 195Patrick.toyne-sewell@gfgalliance.com

    Note to Editors
    LIBERTY Steel Group, part of the GFG Alliance and a leading GREENSTEEL producer, is a global integrated steel business bringing together assets across the steel supply chain, from production of liquid steel from raw and recycled materials through to high value precision engineered steels. With a total rolling capacity of 20 million tonnes, 200+ manufacturing locations globally across 10 countries and employing more than 30,000 people, LIBERTY Steel’s furnaces, mills, services centres and distribution sites across the UK, continental Europe, Australia, the United States and China serve demanding sectors such as construction, energy, aerospace, automotive, and infrastructure. LIBERTY Steel is a leader in sustainable industry with a mission to become Carbon Neutral by 2030 (CN30).

    GFG Alliance issues update on restructuring and refinancing progress

    on 10 October 2021

    • GFG Alliance agrees debt restructuring for LIBERTY Primary Metals Australia with Credit Suisse Asset Management
    • GFG Alliance to inject £50 mn of new funding to relaunch Rotherham (UK) production
    • European and US businesses continue to perform strongly

    Following the creation of LIBERTY Steel Group’s Restructuring and Transformation Committee (RTC) in May 2021 and the sustained progress achieved to date, GFG Alliance (GFG) and the RTC today report further developments across the Group.

    Jeffrey S. Stein, Chief Restructuring Officer said: “I’m pleased to report a significant advance in GFG Alliance’s global restructuring. The debt restructuring we have agreed for LIBERTY Primary Metals Australia gives the business clarity and stability and secures a clear recovery plan for creditors. The funding we are injecting to LIBERTY Steel UK puts it in a strong position for business transformation and debt restructuring. The next stage in our global refinancing will be in Europe where a significant number of new lenders are expressing interest in refinancing our steel assets.”

    Jeffrey Kabel, Chief Transformation Officer, said: “The injection of £50 million of shareholder funds into LIBERTY Steel UK is an important step in our restructuring and transformation. It will help to create sustainable value, ensure that LIBERTY has the ability to raise and deploy capital quickly in the UK and enable our businesses to demonstrate their potential and agree long term debt restructuring.”

    Actions taken

    Australia

    Marking a significant step forward on GFG’s path to recovery following the collapse of its main lender Greensill in March, GFG and Credit Suisse Asset Management (CSAM) have agreed a debt restructuring for LIBERTY Primary Metals Australia (LPMA), which comprises its integrated mining and primary steel business at Whyalla and its coking coal mine at Tahmoor.

    The deal will provide a stable financial platform for our LPMA business and secures a recovery plan for creditors.  LPMA has registered record-breaking performances following its operational efficiency drive, continuous improvement initiatives and favourable market conditions underpinned by strong investment in infrastructure. Continued strength in the steel and coking coal markets has helped to offset the recent correction in iron ore prices.

    The strength of the LPMA business will enable it to make a substantial upfront payment to Greensill Bank and CSAM, which has been closely involved in GFG’s work to refinance and restructure its portfolio following the collapse of GFG’s main lender Greensill Capital. 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. 

    UK

    GFG will inject £50 million of new funding into LIBERTY Steel UK (LSUK) to enable the restart of LSUK’s core Rotherham electric arc furnace. The provision of funding will set the platform to refinance LSUK operations in full, create a leading long-term GREENSTEEL hub, and support the RTC’s work of creating a profitable, restructured and focused business.

    Funds will be allocated to LSUK through a new separate corporate entity LIBERTY Capital. LSUK will run as normal with funding for growth in working capital approved through LIBERTY Capital. This arrangement will ensure fast and effective deployment of the £50 million in initial funds in the UK, enabling LSUK to restart its operations. This will allow time to prove the operations can run efficiently which will enable them to finalise longer term debt restructuring.

    Regional updates

    United Kingdom

    Restart and investment at Rotherham: The capital injection from LIBERTY Capital will enable LSUK to restart production at its GREENSTEEL Rotherham electric arc furnace, where there is a significant opportunity to expand recycling of scrap steel for growth markets such as infrastructure and engineering. Production ramp up will commence in October 2021 with a plan to reach 50,000 tonnes per month as soon as possible. The restart of operations will enable colleagues to return to work, setting the platform for LSUK’s longer term refinancing and delivery of its plan to expand Rotherham’s capacity, creating a two million tonnes per annum GREENSTEEL plant. Investment plans in Rotherham will boost production capacity, increase employment and introduce new products. These plans have been presented to and reviewed by industry consultants on behalf of Trade Unions. A separate report was prepared by advisors to the significant lenders to the UK businesses. LSUK’s downstream operations remain core to LSUK’s asset base and will provide downstream capacity for Rotherham’s output, enabling increased shift opportunities at the Thrybergh and Scunthorpe mills.

    Preparation for responsible sale of Speciality Steel (SSUK): The injection of funding announced today will also enable LSUK’s speciality steel division SSUK (Stocksbridge, Narrow Strip, Performance Steel), which produces steel components for demanding aerospace and energy applications, to run focussed production campaigns for key customers. This will support business continuity, establish a stable operating environment and create an attractive asset. 

    Europe

    In Romania, for the quarter ended 30 June 2021, LIBERTY Galati achieved EBITDA of EUR 84 million, up more than 60% on the previous quarter, the best quarterly result since 2008. The plant reported strong growth in turnover of EUR 492 million, up 37% on the first quarter ended 31 March 2021, from shipments of around 566 KT, 7% more than in Q1. The business is currently in the process of increasing its production towards 3 million tonnes for the year, up from around 2 million in 2020.

    In the Czech Republic, for the quarter ended 30 June 2021, LIBERTY Ostrava increased EBITDA to EUR 103 million up 35% on the previous quarter, the plant’s best quarterly performance since 2011. The steelworks shipped 684,000 tonnes of steel products, up 12% on the previous quarter to make it the best production quarter since 2017. Revenues generated were EUR 507 million, up 26% on Q1 2021 and more than double the same quarter in 2020. The business is in the process of increasing its production towards 2.5 million tonnes for the year, up from around 1.7 million in 2020.

    In Poland, LIBERTY Częstochowa achieved positive EBITDA of €7.1 million for July, and the plant’s highest monthly production levels since 2017. The GREENSTEEL plant produced more than 57,000 tonnes of slab in July, up from only 16,000 tonnes in January, while the rolling mills increased their production of heavy plate up to 42,000 tonnes in July from 12,000 tonnes in January.

    In Italy, the LIBERTY Magona mills have now fully restarted following the initial aspects of the integration into LIBERTY Galati, which is now Magona’s primary supplier of Hot Rolled Coil.

    In the Benelux, the management of LIBERTY Liège-Dudelange have informed the works council of LIBERTY Liège, which comprises two plants in Flémalle and Tilleur, of the main aspects of a possible future organisational structure. The potential new structure has been identified as offering the best long-term future for the company, making it more likely that potential investment will be obtained to support this future. The proposed restructuring project has no impact on the LIBERTY Dudelange site in Luxembourg, which is expected to restart shortly.

    United States

    LIBERTY Steel US results for the half year ended 30 June 2021 show a significant step up over the past two years. H1 earnings of $28.1m were up strongly from $5.8m last year and volumes increased by around 40,000t, buoyed by strong markets – both in the United States and globally – as economies began to rebound from Covid-19.

    Pricing and margins on most steel products have been at all-time highs – HRC prices alone increased more than fourfold year on year. Economic indicators point to solid growth in the US through the rest of 2021, fuelling confidence for next year from customers in the construction, automotive, trucking, heavy and agricultural equipment sectors. A step change improvement has also been achieved in the businesses’ safety record.  It has rolled out GFG’s leading safety indicators, including manufacturing safety and lifesaver critical risk activities, and all indicators are improved from last year with lost time injury rate down 59%.

    Capital programmes have been launched to support earnings growth. Already this year the business has worked to improve reliability of Peoria’s Rod Mill, ordered three fabrication machines for Peoria Wire Products to support strength in agricultural markets, and plans are underway with a wire drawing upgrade project at Johnstown.

    Australia

    The debt restructuring for LIBERTY Primary Metals Australia (LPMA), announced today follows LPMA’s record-breaking performances which saw the business grow revenues from A$1.96bn in FY 2020 to A$2.52bn in FY 2021, and EBITDA grow from A$106m in FY 2020 to A$729m in FY 2021. The forecast for LPMA remains strong due to its ongoing operational efficiency drive, continuous improvement initiatives and favourable market conditions, underpinned by strong investment in infrastructure.

    Federal Environment Minister Sussan Ley this week approved expansion of the Tahmoor coking coal mine in New South Wales. The approval follows conditional approval granted by NSW authorities in April for a 10-year extension of the mine life at Tahmoor and will allow for the mining of an extra 33 million tonnes of high-quality metallurgical coal used in steelmaking and manufacturing.

    Outlook

    In response to the progress achieved by the RTC, Sanjeev Gupta, Executive Chairman of GFG Alliance, commented:

    “Through the hard work and determination of our team, our Australian integrated operations are now profitable and performing the best they have 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.

    “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.”     

    “At the same time GFG’s injection of funding to restart the LIBERTY Steel UK operations is an important step on our road to creating a sustainable UK business. It will allow time to prove the operations can run efficiently which will enable us to finalise longer debt restructuring. The plan highlights the progress we have made since Greensill’s collapse and has secured the support of both creditors and unions.

    “LIBERTY believes as strongly as ever that its GREENSTEEL strategy is the way to reinvent the UK steel sector for a sustainable future. The funding commitment we’re making at Rotherham will safeguard jobs, enable us to benefit from strong outlook for our core sectors and lay the platform to create a sustainable UK business that will generate skilled jobs in industrial communities.

    “Today’s agreement demonstrates GFG and CSAM’s commitment to create certainty for investors, employees, creditors and governments and to building long-term sustainable businesses. Enormous progress has been made since March and we are on track to deliver a refinanced, refocussed business able to deliver our GREENSTEEL vision and build value for all our stakeholders.”

    Further information from:

    Andrew Mitchell
    Head of Communications – UK
    GFG Alliance      		+44 7516 029522andrew.mitchell@gfgalliance.com
    Patrick Toyne-Sewell Head of Communications – Europe  +44 7767 498195patrick.toyne-sewell@gfgalliance.com
    Rod Mapstone Manager, External Affairs – Australia+61 438 294 377  rod.mapstone@gfgalliance.com

    Note to the editors:

    GFG Alliance is a collection of global businesses and investments owned by Sanjeev Gupta and his family. The Alliance is structured into three core industrial pillars; LIBERTY Steel Group, ALVANCE Aluminium Group and SIMEC Energy Group, independent of each other yet united through shared values and a purpose to create a sustainable future for industry and society. GFG Alliance employs 35,000 people, across 10 countries and has revenues of USD $20bn. GFG Alliance is a leader in sustainable industry with a mission to become Carbon Neutral by 2030 (CN30).  

    Tahmoor mine posts record performance

    on 2 August 2021

    SIMEC Mining’s Tahmoor Coking Coal Operation has posted record annual production and output on the back of significant capital investment by GFG Alliance, strong steel and mining markets, and continuous improvement initiatives.

    Peter Vale, SIMEC Mining Head of Coal Mines, said the coking coal mine recorded 40-year highs in its yearly, monthly and daily output in FY21.

    “The team has put in an incredible effort hitting records well above expectation,” said Peter.

    Tahmoor’s yearly output of nearly 3 million tonnes was more than 200,000 tonnes better than the previous benchmark, while the coal handling and preparation plant also washed a record 2.8 million tonnes in the full year.

    “Our strong performance has come on the back of significant capital investment by GFG Alliance including investment in some new state-of-the-art equipment, a sustained continuous improvement program and backed by a strong focus on maintaining high operational standards.

    Earlier this year the Tahmoor operation received conditional approval from the Independent Planning Commission for the Tahmoor South Project, which provides consent for a 10-year extension to the life of the mine.

    It is anticipated that the project will create more than 170 new jobs during the construction phase and boost the local economy over the life of the project.