- Friday, April 26, 2024
By: Chandrashekar Bhat
THE BUSINESS value of the Lochaber-based Liberty Aluminium smelter acquired by GFG Alliance in 2016 has appreciated by a third since the takeover.
GFG Alliance – led by metals tycoon Sanjeev Gupta – bought the smelter along with a nearby hydroelectric plant at Fort William for £330 million in a deal underwritten by the Scottish government.
The business is currently valued at £438m, an increase of £108m since the acquisition, The Sunday Post said.
Scotland’s government had backed the takeover deal with a guarantee nominally valued at £586m, for which it is getting a commercial fee from the company.
A Freedom of Information response cited by the Insider said Liberty Aluminium has fulfilled all its power purchase and guarantee fee obligations since 2016, and “there has been no call – and therefore no resulting public expenditure – against the Scottish Government guarantee”.
It said the government guarantee helped secure the future of the businesses at Lochaber.
“They are now operating profitably and have created 40 new jobs since 2016, increasing direct employment in the complex to 200 jobs while supporting a valuable supply chain with hundreds of associated jobs. The business remains committed to investing in the long term future of the site”, a government spokesperson said.
“There has been no call on the guarantee and the value of the security package held by the Scottish Government in relation to the Lochaber guarantee exceeds its financial exposure according to Treasury Green Book analysis prepared by independent advisers”.
“The net present value of the remaining power purchase agreement revenue stream over the remaining 20 years is £286m, while the companies valued the assets at Fort William at £438m in their 2019 accounts,” the spokesperson said.
However, Scottish Liberal Democrats said GFG has made the gain with hardly any efforts or investments after the deal.
“GFG Alliance is laughing all the way to the bank with the Lochaber smelter deal with the SNP Government,” the party’s economy spokesman Willie Rennie told the Insider.
“The SNP Government have been very secretive over Lochaber and should now come clean on their plans to get GFG to stick to their promises on thousands of extra jobs.”
