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Liberty Steel's parent GFG to reopen Stocksbridge and Rotherham plants

Liberty Steel's parent GFG to reopen Stocksbridge and Rotherham plants
Liberty Steel's parent GFG to reopen Stocksbridge and Rotherham plants

The Gupta Family Group Alliance (GFG), Liberty Steel's owner, has reportedly pledged to reopen its factories in Stocksbridge and Rotherham in South Yorkshire this month, saving the vast majority of 1,000 jobs by injecting more than £50 million worth of cash into the company.

According to reliable sources, the new move arrives after the GFG Alliance, business tycoon Sanjeev Gupta's conglomerate, announced that it had refinanced debts at the alliance’s mining and steel business in Australia.

Using incoming cash-flows from its recovering business, the struggling group is said to have repaid approximately a third of the total debt racked up by Liberty Primary Metals Australia, which comprises a coalmine at Tahmoor and a steel and mining operation in Whyalla.

The remaining debt would be gradually repaid to key lenders; Credit Suisse and the now-defunct Greensill Capital by June 2023. The loan was previously slated to be paid off next year.

Since the collapse of its main lender, Greensill Capital, in March of 2021, GFG has been desperately looking for additional capital to fill a gap. The Serious Fraud Office is looking into GFG's financing arrangements.

The company had intended to acquire additional funds for its Australian operations through a deal with White Oak Global Advisors, but that agreement could not be completed in time. Instead, a turnaround at the Australian unit, whose underlying profits increased to A$729 million (£391 million) this year from A$106 million in 2020, with revenues up more than 29% to A$2.5 billion, helped fund the refinancing.

The deal within Australia also freed up £50 million in cash, which according to Liberty will be used to restart Rotherham facility’s main electric arc furnace. After the UK government's furlough policy expired on September 30, the 1,000 staff members at the two Yorkshire facilities are now on 80% pay, paid by Liberty.

There have been concerns that huge increases in energy prices may prohibit Rotherham from restarting this month. However, sources familiar to the matter have stated that rising steel prices are expected to offset additional energy costs.

Source credit: https://www.theguardian.com/business/2021/oct/10/liberty-steel-owner-gfg-to-restart-rotherham-and-stocksbridge-plants

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.