Debt restructured for high performing Whyalla steelworks

The GFG Alliance has agreed to a debt restructuring for Liberty Primary Metals Australia with Credit Suisse Asset Management, ending uncertainty over the future of the Whyalla steelworks.

The company said Whyalla had ‘registered record-breaking performances following its operational efficiency drive, continuous improvement initiatives and favourable market conditions underpinned by strong investment in infrastructure.’

LPMA’s business grew revenues from $1.96bn in FY 2020 to $2.52bn in FY 2021.

Meanwhile LPMA’s EBITDA grew from $106m in FY 2020 to $729m in FY 2021.

Sanjeev Gupta, Executive Chairman of GFG Alliance, said: “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.

“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.

“I’d like to thank all our stakeholders – government, union representatives, customers, suppliers and of course our employees and the local community – for the support they’ve shown GFG Alliance as we managed our way through the challenges created by the Greensill collapse.”

The improvements in the Australian businesses had offset falls in export prices for iron ore from the company’s mines in the Middleback ranges near Whyalla, and underpin the future for the South Australian operations and its associated coking coal mine at Tahmoor.

Chief restructuring officer Jeffrey S. Stein, said the development was a significant advance in GFG Alliance’s global restructuring.

Stein said: “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 company also announced a 50 million pound funding injection into Liberty Steel UK, plans for Europe and outlined business performance across the global iron ore and steel business.

GFG has been renegotiating debt following the collapse of its main lender Greensill in March.

GFC said in a statement: “The strength of the LPMA business 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 following the collapse of GFG’s main lender Greensill Capital.

“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.”

Federal environment minister Sussan Ley recently approved expansion of the Tahmoor coking coal mine in New South Wales. The approval follows conditional approval granted by NSW authorities in April for a 10-year extension of the mine life at Tahmoor and will allow for the mining of an extra 33 million tonnes of high-quality metallurgical coal used in steelmaking and manufacturing.

Gupta reaffirmed his commitment to Whyalla operations, where he is investing $1 billion in solar and pumped hydro power projects.

Gupta said: “I care deeply about this community and remain committed to our long-term vision to transform Whyalla into a modern greensteel hub.”

Picture: GFC Alliance

Subscribe to our free @AuManufacturing newsletter here.