Metals and mining conglomerate, GFG Alliance, has reached an agreement for the settlement of all debts related to the main creditors of Greensill Capital.
The terms, which lay out GFG’s settlement of claims, remain subject to final binding legal agreement.
This development marks the final chapter of GFG’s debt settlement which has been under negotiation since the collapse of its creditor, Greensill Capital, in March 2021. The agreement once implemented will significantly deleverage GFG, the group has claimed, providing it with the platform to develop longer term sustainable financing for its core operations in Australia, US, UK, Romania and Italy.
In the UK, the development will ‘pave the way for successful completion of the Restructuring Plan for LIBERTY Speciality Steel UK. announced’, a statement from GFG added.
In Australia, the development means that GFG’s InfraBuild business can finalise its FY 2024 accounts, and supports new capital for LIBERTY Primary Metals Australia, including the Whyalla steelworks.
However, the South Australian government remains cautious following the announcement, with South Australia's premier Peter Malinauskas commenting that '[the statement from GFG] within of itself doesn’t mean people owed money on the ground in Whyalla wake up tomorrow and their bank account is paid.”
GFG has taken the decision to launch an expedited process to sell part or all of its equity in Tahmoor Coking Coal mine, with some of the proceeds being available for reinvestment in Whyalla to catch up with supplier payments and boost liquidity, subject to board approval.
GFG has been under intense pressure from the South Australian government to pay tens of millions of dollars owed to creditors of the Whyalla steelworks and the government, including $15 million to SA Water.
“[The] agreement with the Greensill creditors is a great relief for GFG and all our loyal workforce and suppliers.''
Sanjeev Gupta, executive chairman, GFG Alliance
Sanjeev Gupta, GFG Alliance executive chairman, said: “[The] agreement with the Greensill creditors is a great relief for GFG and all our loyal workforce and suppliers. It will enable us to push on from the deep challenges caused by Greensill’s collapse in 2021 and now gives us a financial platform for recovery and growth. With signs of improvements at our operations and some upturn in our markets, we are confident of being able to access longer-term financing to build on the significant investments we have already made in our international businesses, and to rebuild stakeholder confidence.”