Media Type: Archive

GFG Alliance (GFG) and LIBERTY Steel Group’s Restructuring and Transformation Committee (RTC) today provides an update on the restructuring of GFG’s steel businesses.

The developments help pave the way for a refinancing which will enable GFG to pay back creditors following the collapse of its main lender Greensill Capital. This in turn will allow GFG to refocus its business, protect jobs and develop further its remaining assets.

Jeffrey S. Stein, Chief Restructuring Officer (CRO) said: “We are aware of the significant challenges facing the group but are pleased that we are making good progress to refinance, repay creditors and refocus the group on our core assets. Much remains to be done but we are optimistic that a vibrant, well-funded, profitable and sustainable business will emerge as we systematically restructure and transform the group.”

Our approach

The RTC was established on 5th May 2021 to restructure LIBERTY’s operations to focus on core profitable units, and with a brief either to fix or to look at the option of selling underperforming units.

Since May, the RTC has evolved a strategy for LIBERTY’s future which will see the company focus on its primary metal production hubs and associated downstream units, and renewable energy developments, to support its GREENSTEEL vision. The restructuring will support GFG’s progress on refinancing of the group, which has been boosted by the strength of core assets and record steel, aluminium and iron ore prices.

In its reformed state, LIBERTY will be focused on core business units, including InfraBuild and LIBERTY Primary Metals Australia (LPMA) in Australia and the LIBERTY Ostrava and LIBERTY Galati steelworks in Europe. These will continue to be operationally and commercially developed to improve their generation of cash and profits. The plan also incorporates a restructured and refocussed UK business as well as more closely integrating the European downstream steel plants into LIBERTY’s major businesses.

Actions taken

As part of that process GFG and the RTC have already achieved the following:

• GFG Alliance and Credit Suisse Asset Management (CSAM) have agreed a formal standstill agreement with regard to LPMA which will enable the business to complete full refinancing;
• progressing the refinancing of LPMA, with White Oak Global Advisers LLC (White Oak). The refinancing will be sufficient to pay out LPMA’s Greensill debt in full.
• agreement on a framework with Greensill Bank’s administrators (GB) for positive direct engagement to achieve an amicable resolution;
• submission of refinancing memoranda to interested parties for LIBERTY Steel Continental Europe, including major primary production hubs in Ostrava and Galati.
• development of new business plans, asset strategy and management structure for LIBERTY Steel UK

Regional updates

United Kingdom

LIBERTY Steel UK is continuing to assess a sales process for its UK aerospace and special alloys steel business in Stocksbridge, which while being a unique, high quality business servicing marquee customers, is not core to LIBERTY’s future. This sale will allow LIBERTY to focus on developing its Rotherham plant, including its low carbon emitting electric arc furnaces, into a competitive two million tonnes GREENSTEEL plant, one of the largest in Europe.

On the 2nd July the current Managing Director of LSUK, Jon Ferriman, will be stepping down.  The organisation would like to thank Jon for his role in managing the business through Covid-19 and its response to the collapse of Greensill.  Joining LSUK as Chief Executive Officer (CEO) is Roy Chowdhury who brings with him thirty years of industry and turnaround experience.  Roy is joined by Anton Krull as LSUK’s new Chief Financial Officer (CFO), who brings with him twenty years of corporate finance and restructuring experience.    A new management structure to support LSUK’s revised business plan will be announced shortly.

The RTC has also been exploring strategic options regarding the future of the UK Engineering business. The process, which is being supported by Alvarez & Marsal, is focused on identifying new owners which would provide a sustainable future for the business serving automotive OEMs. GFG Alliance and the business’s key customers will continue to work together to provide adequate cash flow to keep the business solvent until the sale process is completed.

Europe

In Europe, the RTC is developing plans to merge its European downstream businesses, LIBERTY Liège-Dudelange (Belgium and Luxembourg) and LIBERTY Magona (Italy), into the LIBERTY Galati organisation to optimise operational integration between the three plants. Under the restructuring LIBERTY Galati, the largest integrated steelworks in Romania, will become the primary supplier of Hot Rolled Coil (HRC) to LIBERTY’s downstream businesses, ensuring a secure and sustainable supply of their raw material. The closer links to the downstream businesses will allow LIBERTY Galati to offer a significantly broader range of high quality products to its existing customer base across Central and South Eastern Europe. As part of the restructuring Renaud Moretti, CEO for LIBERTY Steel Downstream in Europe, will now report into Paramjit Kahlon, LIBERTY’s CEO of Primary Steel and Integrated Mining.

The initial stages of that restructuring programme have already started, with the first supplies of HRC from LIBERTY Galati expected to arrive at the downstream plants within the next few weeks, allowing them to restart their lines soon afterwards. The restructuring is expected to lead to synergies across a range of functional areas, including procurement, IT and accounting.  The company will continue in its constructive dialogue with unions and works councils on these changes.

Australia

The RTC continues to explore potential strategic partnership or sale options for the Cultana Solar Farm and Playford Battery projects in South Australia. The options under consideration will include SIMEC retaining an interest and with GFG retaining priority access to this energy for its Whyalla development plans. This will expedite ways to power the Whyalla operations with low cost renewable energy, which is key to GFG’s future ambitions to scale up production and introduce hydrogen steel making.

Outlook

In response to the progress achieved by the RTC, Sanjeev Gupta, Executive Chairman of GFG Alliance, commented: “Despite the difficult circumstances, GFG Alliance contains many high quality businesses which are performing strongly in record markets where customer demand and pricing are strong. By refocussing our businesses, we will protect more jobs and lay the foundations for future sustainable growth. The refinancing of the group, which is progressing well, brings closer the point of being able to honour our obligations to creditors.”

Further information from:

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

ALVANCE Aluminium Duffel has something to celebrate – this month, the factory is celebrating its 75th anniversary.

Throughout its history, the company has strived to innovate and develop its sustainable aluminium offering for the market.

Despite the corona pandemic’s impact on many sectors of the economy, Duffel plant has maintained a well-filled order book and the outlook for 2021 is positive. In order to meet the growing market demand, the site is looking for 50 new employees to join its ranks of operators and technicians.

Visit the ALVANCE Aluminium Group website to read the full media release.

LIBERTY Steel Group (LIBERTY) announces that following very constructive and productive meetings at the weekend in Dubai, Sanjeev Gupta and his newly-formed Restructuring and Transformation Committee are in advanced discussions with Credit Suisse Asset Management (CS) to reach a formal standstill agreement on its LIBERTY Primary Metals Australia business while refinancing is completed that will repay CS out in full.

Both parties also made significant progress in agreeing a framework to resolve GFG Alliance’s remaining exposure with CS.

This work includes identifying a positive solution which will allow LIBERTY to complete the restructuring and refinancing of its UK operations, protecting thousands of jobs and supporting the fulfilment of its vision to be a leader in the decarbonisation of the UK steel industry.

As part of this restructuring LIBERTY will look to sell its aerospace and special alloys steel business in Stocksbridge, which while being a unique, high quality business servicing marquee customers in aerospace, auto and other highly engineered applications, is not core to the GREENSTEEL vision of LIBERTY.

This sale will allow LIBERTY to focus on developing its Rotherham plant including its electric arc furnaces into a competitive 2 million tonnes recycled GREENSTEEL plant, one of the largest in Europe. The plant will make use of some of the millions of tons of steel scrap currently exported by the UK to make more of the quality steel needed in the UK, which is currently being imported.

LIBERTY has also already commenced the formal sale process of LIBERTY Aluminium Technologies and LIBERTY Pressing Solutions, working collaboratively with the main customers of these plants to find a sustainable home for these quality businesses, which are also non-core to LIBERTY’s vision of decarbonised GREENSTEEL.

Visit the LIBERTY Steel Group website to read the full media release.

LIBERTY Steel Group (LIBERTY) has today announced the appointment of four experienced board directors who will lead and accelerate the restructuring and refinancing of LIBERTY in order to protect and maximise creditor and stakeholder value.

The appointments represent a step forward in LIBERTY’s response to the collapse of its principal lender, Greensill Capital. 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 –  LIBERTY Primary Steel and Mining Australia has today 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.

The new appointments will join the LIBERTY board with immediate effect and form a new Restructuring & Transformation Committee (RTC) which will be led by an independent Chief Restructuring Officer (CRO), and include an independent Chief Transformation Officer (CTO), a Chief Governance Officer (CGO) and a newly appointed Chief Financial Officer (CFO).  The RTC will be supported by LIBERTY management and report to the full LIBERTY board.

The RTC will be given full autonomy to restructure LIBERTY’s operations to focus on core profitable units, and either fix or sell underperforming units.  This restructuring combined with the continuing strength in steel and iron ore markets will present a solid basis for the future of LIBERTY.  The RTC will support stakeholder engagement and work with the LIBERTY board and its adviser panel, comprising of PJT, Alvarez & Marsal and Norton Rose Fulbright, to negotiate an amicable solution with Greensill’s administrators and other stakeholders which protects value and provides the best outcome for all stakeholders.

Visit the LIBERTY Steel Group website to read the full media release for details.

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.

After the disruption caused by both Brexit and COVID-19, Wyelands shareholder has recently capitalised the business with a cash injection of c.£75 million.  The result of this action is that Wyelands Bank is able it to pay back its retail depositors in full as part of a plan it is agreeing with regulators.  Following conversations with regulators, the shareholder will submit a new strategy focused on its core business lending activities.

Sanjeev Gupta, a shareholder of Wyelands Bank, said “After the turmoil created by both Brexit and the pandemic, the shareholders of Wyelands have recapitalised the business to ensure retail depositors are repaid in full.” Wyelands Bank is in a process of returning the retail deposits it holds on behalf of personal savers and the shareholder will recommend plans to focus solely on business advisory and connected finance, its shareholder said today.   

ALVANCE Aluminium Duffel BV has delivered the first coils certified under the Aluminium Stewardship Initiative (ASI) Chain of Custody standard to the Audi plant in Neckarsulm (Germany). The ASI-badged coils will be used in the production of various models, starting with the Audi A6. Through this milestone, both companies are demonstrating their common and ongoing commitment to make concrete efforts to increase sustainability.

ALVANCE Aluminium Duffel was awarded the ASI Chain of Custody standard at the beginning of July 2020*. This certificate ensures that not only the operations at the facility in Duffel meet the ASI standards, but also that the aluminium material has been sourced and produced in a responsible and sustainable way across the entire supply chain, from the extraction of bauxite up to the finished product.

To this end ALVANCE Aluminium Duffel is working with ALVANCE Aluminium Dunkerque on exploring the potential for its sister company to supply metal for its automotive products. ALVANCE Aluminium Dunkerque is the largest smelter in Europe and produces some of the lowest carbon aluminium on the market. The smelter is also ASI accredited under the body’s Performance Standard for responsible production, sourcing and stewardship of aluminium. By sourcing its metal from Dunkerque, ALVANCE Aluminium Duffel strives to enhance its sustainable value chain with ASI accreditation embedded in the entire process, from smelting to rolling.

Read the full media release on the ALVANCE Aluminium Group website

LIBERTY Steel Group, part of Sanjeev Gupta’s sustainable industry leader GFG Alliance, has signed a Memorandum of Understanding (MoU) with Paul Wurth and SHS – Stahl-Holding-Saar (SHS) to assess the building and operating of an industrial-sized, hydrogen-based steel making plant at Dunkerque in France. If developed, the plant would be one of the first operations of its type in France.

The pan-European partnership will work together on a project to incorporate a 2 million tonne Direct Reduced Iron (DRI) plant, with an integrated 1 GW capacity hydrogen electrolysis production unit, next to GFG’s ALVANCE Aluminium Dunkerque site. The DRI plant will initially use a mix of hydrogen and natural gas as the reductant to produce DRI and hot-briquetted iron (HBI), before transitioning to using 100% hydrogen once the electrolysis production unit is complete. The DRI/HBI produced will primarily be used in the electric arc furnace of LIBERTY Ascoval in France but any surplus will be used at LIBERTY’s Ostrava and Galati integrated steelworks as well as the SHS-group’s Dillinger and Saarstahl plants in Germany.

Read the press release on LIBERY Steel Group

Sustainable industry leader GFG Alliance has appointed Brendan Leddy as Head of Compliance.

Brendan is responsible for building out GFG’s existing compliance function as part of the company’s commitment to strong governance. He will work closely with senior management and stakeholders to ensure the business complies with regulatory and policy requirements globally.

Brendan has over 20 years of international experience in compliance and risk oversight. In his previous role as Chief Compliance Officer, Head of Risk and MLRO at Tellimer Group, he provided management oversight across the UK, USA, LATAM, and MENA and established a regulated entity in Dubai. He has held senior compliance roles at organisations including BACB Bank, CLS Bank, ANZ Bank, and UBS AG.

A highly experienced and reputed practitioner, Brendan has been awarded a Fellowship by the International Compliance Association and is an accredited member of the Association of the Professional Compliance Consultants, the Chartered Institute of Securities and Investments, and the Institute of Directors.

Sanjeev Gupta, Executive Chairman said: “I am pleased to welcome Brendan to GFG Alliance as Head of Compliance, an important development in our organisation’s journey as we continue to grow and mature. We have been making positive strides in meeting our strategic goals and objectives and Brendan’s knowledge of the ever-changing regulatory environment will be invaluable. I look forward to seeing our culture of compliance bolstered with his vast expertise.”

Sustainable industry leader GFG Alliance has appointed Angelo Zavattieri as Head of Mining M&A.

The new role, based initially in Dubai then transferring to London, will see Angelo developing opportunities to build GFG Alliance’s mining portfolio within the framework of GFG’s economic, social, and environmental sustainability commitments and in alignment with the group’s CN30 mission.

Angelo brings over a decade of experience in metals and mining and was most recently Vice President, Head of M&A at Saudi Arabian Mining Co., where he oversaw the acquisition of Meridian. He has also held senior roles in Klesch & Co, BHP, Barclays, and Deutsche Bank, including Head of M&A at SOUTH32 and Vice President Acquisitions & Divestments at BHP Billiton.

Alongside his wealth of specialised knowledge in mining, Angelo also brings wide-ranging expertise across oil and gas, infrastructure, and power and utilities sectors. He is a business graduate from Columbia University.

Jay Hambro, Chief Investment Officer GFG Alliance said: “I am delighted to welcome Angelo to this new role at GFG Alliance as we continue to improve the scope of our global operations. His extensive global M&A expertise makes him well positioned to capitalise on opportunities in mining, guided by our economic, social, and environmental strategic ambitions.”