GFG Alliance defends Tahmoor Coal, OneSteel future
Thursday, April 8th, 2021
The collapse of German financier Greensill Capital has thrown the future of the GFG Alliance into jeopardy, with Australia’s Whyalla steel mill and Tahmoor Coal caught in the crossfire.
Greensill was recently placed under administration as its funds were frozen by financial services group Credit Suisse, leaving GFG with a need to refinance its assets.
In a knock-on effect, Credit Suisse trustee Citibank filed a wind-up order in the New South Wales Supreme Court for GFG-owned OneSteel Manufacturing and Tahmoor Coal.
A spokesperson from the GFG Alliance said the company’s Australian mining and primary steel (MPS) business would vigorously defend any proceedings filed against the company as it did not conduct any financing with and has not sold receivables to Credit Suisse.
The spokesperson said the wind-up notice was unnecessary as GFG was within reach of refinancing.
“GFG confirms it has received multiple offers of finance from large investment funds and is in advanced due diligence,” the company spokesperson said.
“The term sheets as currently proposed would provide enough cash to repay the creditors of MPS. GFG Alliance expects the confirmatory due diligence to be complete within weeks before a final offer is accepted.
“GFG Alliance is in constructive discussions with Grant Thornton, Greensill’s administrators, and other stakeholders to negotiate a consensual and amicable solution on the way forward, which is in the best interests of all stakeholders.”
The South Australian-based Whyalla steel mill, owned by OneSteel, produces 1.2 million tonnes per year, while the Tahmoor Coal operation in the Illawara region of New South Wales produces three million tonnes per year.
The GFG spokesperson said they were well positioned to receive support at this time due to the success of the respective operations.
“The Australian businesses are performing well and generating positive cash flow, supported by the operational improvements we’ve made and strong steel and iron ore markets,” they said.
The supreme court hearing is scheduled for early May.https://www.australianmining.com.au/news/gfg-alliance-defends-tahmoor-coal-onesteel-survival/