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Refinancing dance rolls on as GFG's six-week Whyalla extension runs out

Business

A six-week standstill agreement with Credit Suisse has expired without Sanjeev Gupta’s GFG Alliance finalising the refinancing of its Australian operations – but the company insists its negotiations to secure the future of the Whyalla Steelworks are progressing well.

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Credit Suisse Asset Management (CSAM) is looking to recover billions of supply-chain finance funds globally after GFG’s main financier Greensill was placed into administration in March.

Citibank is acting on behalf of CSAM. A directions hearing in the NSW Supreme Court was set for May 6 but was deferred to July 5 after an eleventh-hour announcement by GFG that it had agreed to a new financing deal to cover its Greensill debt.

The court action aims to wind up the operations GFG’s LIBERTY Primary Metals Australia (LPMA), including the Whyalla Steelworks and a coking coal mine in NSW.

On June 23 GFG announced it had negotiated a six-week standstill agreement with Credit Suisse.

The six weeks ended on August 4 without GFG Alliance yet to announce the finalisation of a re-financing deal.

A GFG Alliance spokesperson said the company was working closely with Credit Suisse Asset Management and other creditors to secure alternative long-term funding.

“GFG Alliance’s Restructuring and Transformation Committee continue to make good progress on restructuring,” the spokesperson said.

“LPMA businesses are performing well and generating positive cash flow, supported by operational improvements and strong mining and steel markets.

“We are not in a position to comment further.”

GFG had previously said it expected the full refinancing to be complete within the six-week timeframe.

The Whyalla steelworks is the town’s biggest employer with around 1200 workers and a further 600 work in the associated Middleback Ranges mines nearby.

British billionaire industrialist Sanjeev Gupta was hailed a saviour of the Whyalla business and town after former steelworks owner Arrium went into administration and he took it over in 2017, vowing to improve and expand the operation.

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