Deal gives Whyalla 'clarity and stability'
A debt restructuring deal will give clarity and stability to the Australian operations of GFG Alliance, including its NSW coal mine and South Australian steelworks, the company says.
In a statement on Monday, the company said it had agreed with Credit Suisse Asset Management to a deal to provide a stable financial platform for Liberty Primary Metals Australia which includes the Tahmoor coking coal mine in NSW and the Whyalla steel operations in SA.
"The debt restructuring gives the business clarity and stability and secures a clear recovery plan for creditors," Chief Restructuring Officer Jeffrey Stein said.
The company said its Australian operations had registered record-breaking performances following its operational efficiency drive, continuous improvement initiatives and favourable market conditions underpinned by strong investment in infrastructure.
It said continued strength in the steel and coking coal markets had also helped offset the recent correction in iron ore prices.
Concerns over the future of the Whyalla operations emerged earlier this year after the collapse of GFG's main lender Greensill Capital.
GFG said the strength of its Australian operations would now allow it to make a substantial upfront payment to Greensill Bank and Credit Suisse which had been closely involved in its work to refinance and restructure its portfolio.
South Australian Premier Steven Marshall said the completion of funding arrangements was fantastic news for Whyalla and came on the back of a much-improved performance by the steelworks.
"There's been a massive surge in revenue, a massive surge in profitability and that is a great testament to the people working in Whyalla," he said.
Whyalla Mayor Clare McLaughlin said the financing deal should put an end to the ongoing negative speculation about the future of the city.
Ms McLaughlin said Whyalla had always been right behind GFG and its owner, British industrialist Sanjeev Gupta.
"We have reinforced that Whyalla will only continue to strengthen and is now perfectly poised to capitalise on the exciting opportunities ahead," she said in a statement.
"This news will stimulate confidence in the private sector and may well open the doors to additional new investment in complementary projects that will drive the greening of heavy industry and energy production.
"The local GFG team has done an outstanding job to turn the operations around into a business that is now profitable, has strong forward sales and is setting regular production records."
Mr Gupta said he cared deeply about the Whyalla community and remained committed to the long-term vision to transform the local operations into a modern steelmaking hub.
"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," he said.