Steelmaker Liberty Steel, part of the GFG Alliance, has reached an agreement to restructure its global debt with some of its main creditors, although it is still negotiating debt restructuring for its European business, it said Nov. 15.
The group has signed a term sheet with parties responsible for the main creditors of Greensill Capital, Greensill Bank and Credit Suisse Asset Management, its Restructuring and Transformation Committee said in a statement, adding that this was “a major step in the group’s refinancing.”
However, it did not provide an amount for the debt restructuring.
Liberty and its largest creditor Greensill Bank were still negotiating a similar term sheet for the debt restructuring of the European steel businesses, it said.
“After several months of negotiations, we have now reached an agreement in principle that will provide recovery for the creditors and will significantly deleverage and de-risk Liberty,” Liberty Steel Group Chief Transformation Officer Jeffrey Kabel said.
“This is a major step forward in our restructuring and transformation and we will now work at pace with the creditors to prepare and execute the agreement,” he added.
The agreement would allow Liberty to further advance its low carbon “GREENSTEEL” strategy and its aim to become carbon neutral by 2030, the company said, although the agreement remained subject to documentation and internal approvals.
“All parties will now work to prepare and execute the agreement, providing Liberty with the platform to develop longer term sustainable financing,” it said.
Liberty Steel started to experience cash flow difficulties following the collapse of largest debt facility provider Greensill Capital in March 2021.
In June, Liberty reached a debt standstill agreement with Greensill Bank on debt facilities for its European business.
This came just after Citibank said it planned to pursue a winding-up order against three GFG Alliance companies due to alleged overdue payments worth a total of around $215.50 million. However, Liberty said Nov. 15 that, under the agreement, the parties had adjourned the winding up petitions against its entities.
Steel prices have been weak in the second half of 2022, with Platts, part of S&P Global Commodity Insights, assessing domestic HRC prices in Northern Europe at Eur625/mt ex-works Ruhr Nov. 14, down 32.2% since the start of 2022.
— Jacqueline Holman
