GFG Alliance chairman and chief executive officer Sanjeev Gupta is looking to divest some or all of GFG’s stake in the Tahmoor coal mine in New South Wales, according to media reports.
Select proceeds from the sale, said to be as high as $US500 million ($787 million), will be used to repay creditors of the Whyalla steelworks business in South Australia, which Gupta acquired from Glencore in 2018.
The Whyalla steelworks blast furnace came back online in January after a four-month shutdown caused by various operational challenges and extensive repairs.
In a statement provided to the ABC, GFG Alliance said it intends to begin an “expedited process” to sell its equity in Tahmoor, with part of the proceeds “being available for reinvestment in Whyalla”.
The funds will also go towards supplier payments and liquidity. The proposal is currently pending approval from the GFG Alliance board.
Gupta also announced that he had “reached an agreement on commercial terms” with the main creditors of Greensill Capital, a UK-based finance firm that was GFG’s financer. It ceased operations in 2021.
Gupta said the deal was a “great relief” for GFG Alliance.
“It will enable us to push on from the deep challenges caused by Greensill’s collapse in 2021 and now gives us a financial platform for recovery and growth,” Gupta said.
“With signs of improvements at our operations and some upturn in our markets, we are confident of being able to access longer-term financing to build on the significant investments we have already made in our international businesses, and to rebuild stakeholder confidence.”
Gupta is also close to finalising a $US100 million capital raising to bolster Whyalla’s operations.
The South Australian Government welcomed Gupta’s announcements but said it would remain cautious.
“This statement (from GFG) within of itself doesn’t mean people owed money on the ground in Whyalla wake up tomorrow and their bank account is paid,” SA Premier Peter Malinauskas told ABC Radio Adelaide.
“That is not going to happen in reality, as welcome as it would be from our perspective … I am deliberately cautious about this because over the months and years across governments of all political persuasions, we’ve seen statement after statement be released by GFG.
“So, we approach this with caution, notwithstanding the fact that it’s welcome.”
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