GFG Alliance is reportedly in talks with Glencore to refinance debt at its European aluminium business Alvance.
The news, first reported in the Financial Times, comes as the Sanjeev Gupta-owned company looks to restructure and refinance its debt after the collapse of supply chain finance group Greensill Capital. According to the BBC, this led to GFG Alliance losing more than £1bn.
The Financial Times reported that Glencore is in discussions to refinance more than $500m (£361m) of debt at Alvance, which has assets based in France and Belgium. The agreement will mean Gupta would remain the firm’s owner.
According to documents published by GFG Alliance in March, Alvance had an enterprise value of more than $1bn (£722m), based on expected earnings of more than $150m (£108m) for 2021. Glencore’s aluminium unit, meanwhile, already buys its metal from Liberty Steel - another company owned by GFG Alliance.
Credit Strategy has reached out to both Glencore and GFG Alliance for comment. Glencore declined to comment. A spokesperson for GFG Alliance, meanwhile, said: “GFG continues to focus on the restructuring and refinancing of its businesses following the collapse of Greensill Capital. The Alvance portfolio is performing well supported by strong market conditions.”
According to the Financial Times, the deal with Glencore would repay several debt facilities across the Alvance business. Alvance’s Dunkirk aluminum smelter - which is the largest in Europe - has a $260m (£187m) loan against it, while its rolling mill has a further $59m (£42m) of debt.