GFG signs deal with Glencore to refinance aluminium unit
METALS major Sanjeev Gupta’s GFG Alliance said it has agreed a deal with commodities giant Glencore to refinance the debt on its aluminium unit.
The conglomerate has been struggling for refinancing its
cash-strapped businesses in steel, aluminium and energy after the collapse of
its main financier Greensill Capital in March.
As per the deal, Glencore would provide a six-year loan to
acquire most of the debt on GFG’s European aluminium smelters, Bloomberg
reported citing an internal GFG memo.
GFG’s European aluminium business under the Alvance group
include vast smelter in Dunkirk, France, and an associated rolling mill in
Duffel, Belgium.
As part of the deal, commodity traders Glencore and
Trafigura would supply raw materials to GFG’s aluminium business.
The outline term of the deal is around $450million (£323m),
a spokeswoman for Trafigura told Bloomberg.
“These agreements will help secure the working capital needs
of the businesses and allow us to de-risk the business by capturing the current
strong prices,” the GFG note said.
Besides, GFG turned down an offer from American Industrial
Partners (AIP) to buy its aluminium assets and was expecting to use the
Glencore facilities to repay debt owned to AIP, as per a Reuters report.
In April, AIP, a US private equity group, bought most of the
senior debt related to the Dunkirk smelter and the Duffel rolling mill in Belgium,
putting it in a leading position to buy the assets.
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