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UK Corona Update 
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India corona update 
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Today's Fatalities 431
Today's Cases 30,570

Business

GFG signs deal with Glencore to refinance aluminium unit

Sanjeev Gupta, head of GFG Alliance. (Getty Images)

By: Shilpa Sharma

METALS major Sanjeev Gupta’s GFG Alliance said it has agreed a deal with commodities giant Glencore to refinance the debt on its aluminium unit.

The conglomerate has been struggling for refinancing its cash-strapped businesses in steel, aluminium and energy after the collapse of its main financier Greensill Capital in March.

As per the deal, Glencore would provide a six-year loan to acquire most of the debt on GFG’s European aluminium smelters, Bloomberg reported citing an internal GFG memo.

GFG’s European aluminium business under the Alvance group include vast smelter in Dunkirk, France, and an associated rolling mill in Duffel, Belgium.

As part of the deal, commodity traders Glencore and Trafigura would supply raw materials to GFG’s aluminium business.

The outline term of the deal is around $450million (£323m), a spokeswoman for Trafigura told Bloomberg.

“These agreements will help secure the working capital needs of the businesses and allow us to de-risk the business by capturing the current strong prices,” the GFG note said.

Besides, GFG turned down an offer from American Industrial Partners (AIP) to buy its aluminium assets and was expecting to use the Glencore facilities to repay debt owned to AIP, as per a Reuters report.

In April, AIP, a US private equity group, bought most of the senior debt related to the Dunkirk smelter and the Duffel rolling mill in Belgium, putting it in a leading position to buy the assets.

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