GFG Alliance (GFG) and LIBERTY Steel Group’s Restructuring and Transformation Committee (RTC) have reported a significant advance in GFG’s global restructuring, following the RTC’s sustained progress since its creation in May.
“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,” GFG chief restructuring officer Jeffrey S. Stein said.
Actions taken in 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). This 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 LPMA 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 LPMA 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. 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.
“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,” GFG Alliance executive chairman Sanjeev Gupta said, in response to the RTC’s progress.
“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.”
Updates for Australia
The debt restructuring for LIBERTY Primary Metals Australia follows its record-breaking performances, which saw the business grow revenues from $1.96 billion in FY 2020 to $2.52 billion in FY 2021, and EBITDA grow from $106 million in FY 2020 to $729 million 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 approved the expansion of the Tahmoor coking coal mine in NSW. The approval follows conditional approval granted by NSW authorities in April for a 10-year extension of the mine life at Tahmoor. It will allow for the mining of an extra 33 million tonnes of high-quality metallurgical coal used in steelmaking and manufacturing.
Gupta thanked all of GFG’s stakeholders for the support shown as the company navigated 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,” Gupta said.
“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.”