 "Liberty Steel group, Sanjeev Gupta")
Liberty Steel UK, owned by British Indian businessman Sanjeev Gupta, will receive a cash injection of GBP 50-million after its parent company agreed a financial restructuring plan to revive steel production.
GFG Alliance, which includes Liberty Steel UK, announced over the weekend that it has agreed debt restructuring for Liberty Primary Metals Australia with Credit Suisse Asset Management.
As part of the plan, GFG will inject the new funding to relaunch production at its Rotherham-based Liberty Steel UK plant bringing hundreds of workers back into work from furlough or a government-backed leave to prevent job losses. The GFG Restructuring and Transformation Committee had been set up in the wake of the collapse of Liberty's main lender, Greensill Capital, earlier this year.
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, said Gupta, Executive Chairman of GFG Alliance.
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, he said.
Liberty's Rotherham site in northern England employs around 660 staff. The businessman said the funding commitment to the Rotherham plant will safeguard jobs and also create a sustainable UK business that will generate more skilled jobs within the industrial communities.
Jeffrey Kabel, the company's Chief Transformation Officer, said: The injection of GBP 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 to long term debt restructuring.
GFG and Credit Suisse Asset Management (CSAM) agreed 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. GFG said the deal will provide a stable financial platform for its LPMA business and secure a recovery plan for creditors. It also asserted that its European and US businesses continue to perform strongly.
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, said Jeffrey S. Stein, Chief Restructuring Officer.
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, he said.
Funds will be allocated to Liberty Steel UK (LSUK) through a new separate corporate entity Liberty Capital, GFG Alliance said.
It said this arrangement will ensure fast and effective deployment of the GBP 50 million in initial funds in the UK, enabling LSUK to restart its operations. This, it says, will allow time to prove the operations can run efficiently which will enable them to finalise longer term debt restructuring.
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