GFG Alliance bids to acquire Stemcor: reports

Sanjeev Gupta-led GFG Alliance has submitted a bid to acquire UK-based trading firm Stemcor, Financial Times reports. The bid included a range of potential valuations, with the lowest just shy of Stemcor’s net asset value of $150 million, the paper says based on comments from unnamed sources close to the situation.

Stemcor says it is unable to comment on a specific bid by any group. However, it tells Kallanish: “On the strength of consistently profitable results, a term debt free balance sheet and established access to commodity trade finance, Stemcor is evaluating options around the ideal future ownership structure for the Group. Stemcor has appointed advisors to assist with this process and has been approached by a number of interested parties.”

GFG Alliance, whose flagship company is $15 billion annual turnover Liberty House Group, did not respond to requests for comment.

Liberty has been on a steel asset spending spree in recent years, with the most high-profile transaction so far being its purchase in October of ArcelorMittal’s Ostrava, Galati, Skopje and Piombino plants.

Earlier this month it signed a binding agreement to purchase all of the outstanding stock in US steelmaker Keystone Consolidated Industries from Contran Corporation. It also launched a plan that could see a new 10 million tonne/year steelworks be built next to its existing steelworks in South Australia’s Whyalla.

Stemcor underwent a major restructuring in 2015, finally returning to profit in 2017. Sales volumes of steel and raw materials fell by -15% year-on-year last year to 3.7 million tonnes. Revenue nevertheless increased 8% to $2.11 billion, and the firm turned to an adjusted group profit before tax of $19 million versus a loss of $3.2m in 2016.