GFG Alliance said on 23 June it has penned a standstill agreement with Credit Suisse on the Australian unit that includes its Whyalla steelworks to complete a refinancing of that business following the collapse of Greensill Capital.
The six-week standstill between GFG and Credit Suisse Asset Management will enable GFG to complete a full refinancing of the unit, Liberty Primary Metals Australia, which also includes mining assets, according to an emailed statement from GFG.
The refinancing is “expected to complete within this time frame,” it said.
The company, controlled by British metals magnate Sanjeev Gupta, had financing arrangements with Greensill Capital, which exposed it to the latter’s bankruptcy. GFG employs about 35,000 people across Europe, Australia and the US in a sprawling business that makes steel and aluminium, produces energy and manufactures goods from bicycles to hubcaps.
The standstill agreement will temporarily safeguard GFG’s Whyalla steelworks and Tahmoor coal mine from any further attempt by Credit Suisse to have the businesses wound up.
GFG said refinancing efforts have been supported by strong commodity prices.
“Sanjeev Gupta and GFG Alliance’s restructuring and transformation committee continue to make good progress on restructuring and refinancing of the group with all creditors, supported by record steel and aluminium prices, in addition to operational improvement at its major plants,” GFG said in the statement.
A Credit Suisse spokesman declined to comment.
Write to Rhiannon Hoyle at [email protected]
This article was published by Dow Jones Newswires