Liberty Steel reaches agreement on global debt restructuring

The Liberty Steel subsidiary of the London-based GFG Alliance has announced it has reached an agreement on global debt restructuring with the main creditors of Greensill Capital (UK) Limited and its sister company Greensill Bank AG of Germany. Those two companies filed for bankruptcy last year, leaving GFG Alliance operations in Europe with limited access to credit lines.

Earlier this year, the company had announced that GFG and its metals producing subsidiaries had been struggling with cash flow and financing issues since the collapse of Greensill Capital and Greensill Bank in the first quarter of 2021.

Liberty Steel reports that it has signed a term sheet subject to contract on an agreement principle for a debt restructuring with parties responsible for the main creditors of United Kingdom-based Greensill Capital Ltd., Germany-based Greensill Bank AG and Switzerland-based Credit Suisse Asset Management Ltd. The company says Liberty and Greensill Bank as main creditors are in the process of negotiating a similar term sheet for the debt restructuring of Liberty’s European steel businesses.

According to a news release from Liberty Steel Group, the agreement with unnamed parties remains subject to documentation and respective internal approvals. The company says all parties will work to prepare the agreement, providing Liberty with the platform to develop longer term sustainable financing. Under the agreement, the parties have adjourned the winding up petitions against Liberty entities.

Liberty says the agreement will enable it to advance its Greensteel strategy and ambition to become carbon neutral by 2030.

“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 derisk Liberty,” says Jeffrey Kabel, chief transformation officer of Liberty Steel Group. “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.”