The struggle to keep Gupta Family Group Alliance’s assets funded continued last week as its head Sanjeev Gupta continued talks with Glencore plc to refinance the debt of GFG Alliance’s aluminium assets in Europe.
Sources told AlCircle over the weekend that Glencore is in talks with GFG Alliance to refinance its over US$500 million in debt to Alvance, which operates aluminium assets in France and Belgium. The sources say that the deal would allow Gupta to remain the chair and owner of Alvance, which is decidedly different than a previous proposal by American Industrial Partners (AIP) to acquire the assets outright.
“We are keen to expand the business and have been looking for potential deals,” explained Glencore aluminium division head Robin Scheiner.
The new emphasis on acquiring aluminium assets comes as a result of a spike in aluminium prices in the past several months, rebounding from the coronavirus pandemic due to a greater demand across a variety of sectors.
For its part, GFG Alliance neither confirmed nor denied the rumors.
“We continue to focus on the restructuring and refinancing of our businesses following the collapse of Greensill Capital. The Alvance portfolio is performing well, supported by strong market conditions.”
At the moment Alvance’s Dunkirk smelter has an outstanding loan of US$260 million, while the Duffel aluminium rolling mill is under US$59 million in debt. In addition to the US$73 million in financing from foundering Greensill, Alvance has a debt of US$131 million to BlackRock.
Alvance’s biggest asset is the Dunkirk smelter, which produces 280 thousand metric tons of primary aluminium per annum. Liberty acquired Europe’s biggest smelter from Rio Tinto in 2018 for US$500 million.