A financing deal was recently struck between steel tycoon Sanjeev Gupta’s GFG Alliance with international banks for the purchase of Rio Tinto’s Dunkerque aluminum smelter in France, one of Europe’s largest smelters. The Liberty House Group is a part of the GFG Alliance.
The term loan secured on standard financial terms provides five-year committed funds, Liberty said in a press release. Analysts say the development clears the way for the deal to be formally completed before the end of November.
Gupta, the executive chairman of the GFG Alliance, was quoted as saying, “This transaction allows us to press ahead with our plans to develop Dunkerque, to expand production and create added-value downstream operations. This agreement underlines the support of the banking community for GFG’s vision for economic and environmental sustainability.”
The agreement comes after a series of talks which also involved getting the French government’s approval, plus garnering long-term power price contracts.
According to GFG Alliance, there will now be more investments in the property after the plant is eventually acquired. Previously, Liberty House acquired an aluminum wheels facility in Chateauroux. With these purchases the firm will position itself as a major integrated manufacturing business, producing metals and components for the automotive and other growing industries in France.
The Dunkerque smelter boasts an annual capacity of 270,000 tons. The smelter was commissioned in 1991 and later purchased by Alcan, which was then purchased by Rio Tinto about a decade ago.
Liberty is part of the GFG Alliance, a global group of energy, mining, metals, engineering, logistics and financial services businesses, headquartered in London. GFG has additional hubs in Dubai, Hong Kong, Singapore, Sydney, Paris and New York, and a presence in around 30 countries worldwide. The GFG Alliance has a turnover exceeding U.S. $15 billion, and features integrated industrials and metals businesses under the Liberty banner.
Recently, Liberty Steel announced an agreement to deal with ArcelorMittal to acquire three European steel plants, signaling another major expansion by the British-owned Liberty Steel.