GFG Alliance update on restructuring and refinancing - Rotherham restart

GFG Alliance to inject £50mln of new funding to relaunch Rotherham, UK, production.

The funding will enable the restart of Liberty Steel UK’s (LSUK) 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 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, the company says, ensure fast and effective deployment of the £50 mln 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.

Production ramp up will commence this month with a plan to reach 50,000 tonnes per month as soon as possible. The output will, in turn, drive shift opportunities at the Thrybergh and Scunthorpe mills.

Speciality sale

LSUK’s speciality steel division SSUK (Stocksbridge, Narrow Strip, Performance Steel), which produces steel components for demanding aerospace and energy applications, will run focused production campaigns for key customers. This will support business continuity, establish a stable operating environment and, the company notes,create an attractive asset.

Internationally

In Australia, 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, will provide business funding and a recovery plan for creditors.

In Italy, the Liberty Magona mills have 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 proposed restructuring project has no impact on the Liberty Dudelange site in Luxembourg, which is expected to restart shortly.

Jeffrey S. Stein, Chief Restructuring Officer says, ‘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.’