Spanish holding Grupo Industrial Cristian Lay (CL) has proposed an offer for the 100% acquisition of steelmaker Gallardo Balboa, the potential investor tells Kallanish.
The supplier of light long products for the construction sector was acquired at the end of last year by investment fund Kohlberg Kravis Roberts (KKR). The move was designed to save the company from insolvency. The board of Gallardo Balboa has been working on a long-term solution for the company since November 2019.
“CL has presented to the bank a proposal to lift the pre-contest of creditors declared by Gallardo Balboa, to reinforce the own resources by means of a capital increase and inject additional liquidity,” Grupo Industrial says. CL will guarantee all of Gallardo Balboa`s commitments to suppliers as well as maintain the activity of the steelmaker’s subsidiaries and continuity of its 900 employees, the investor adds.
“Our offer, compared to others that suppose the dismemberment of the company, guarantees the continuity of jobs and all the activity of Grupo Gallardo Balboa, especially that of the Jerez de los Caballeros,” says Grupo Industrial CL president Ricardo Leal. Both the Government of Extremadura and the Gallardo Balboa council have expressed their support for the negotiations.
“The potential investor commits to maintain all jobs in the company, which is essential for the region. It is the best offer for the interests of Jerez and Extremadura,” comments Government of Extremadura President Guillermo Fernández Vara.
Grupo Gallardo Balboa declined to comment on the negotiation process, but it is understood other parties are still interested in the assets of the steelmaker.