Crisis-hit metals giant GFG Alliance, which owns Fort William aluminium smelter, is selling off a number of businesses as part of a major restructuring and refinancing of its UK operations.
The announcement, involving parts of its Liberty Steel division employing around 1,500 people, followed crunch talks between the company and creditor Credit Suisse (CS).
GFG, which is headed by Sanjeev Gupta, said the move would protect thousands of jobs.
The group is now looking for a buyer for its Stocksbridge plant, in South Yorkshire, which has a workforce of 800.
It has also started a formal sale process for Liberty Pressing Solutions, in Coventry, and Liberty Aluminium Technologies, with sites in Essex and Kidderminster and will try to sell its manufacturing facilities in Brinsworth, South Yorkshire, and in West Bromwich.
GFG was heavily reliant on Greensill Capital, which collapsed earlier this year, raising concerns for the future of the group, which employs 5,000 people in the UK, including around 200 in Lochaber.
When the lender went into administration in March, its lawyers revealed that it had around £3.5 billion of exposure to GFG. Swiss investment bank CS lost more than £1bn in Greensill’s collapse.
‘Constructive’ talks
GFG described the weekend talks with CS, in Dubai, as “constructive and productive.” It said it was in advanced discussions with to reach a “formal standstill agreement” on its Liberty Primary Metals Australia business while refinancing is completed that will repay the bank in full.
In a statement, GFG added: “Both parties also made significant progress in agreeing a framework to resolve GFG Alliance’s remaining exposure with CS.
“This work includes identifying a positive solution which will allow Liberty to complete the restructuring and refinancing of its UK operations, protecting thousands of jobs and supporting the fulfilment of its vision to be a leader in the decarbonisation of the UK steel industry.
“As part of this restructuring Liberty will look to sell its aerospace and special alloys steel business in Stocksbridge, which while being a unique, high quality business servicing marquee customers in aerospace, auto and other highly engineered applications, is not core to the Greensteel vision of Liberty.”
The company said the sale would allow it to focus on developing its Rotherham plant, which reprocesses steel scrap.
Earlier this month, the Serious Fraud Office (SFO) announced it was investigating “suspected fraud, fraudulent trading and money laundering” in relation to the financing and conduct of business at GFG companies. The probe will include the group’s financing arrangements with Greensill.
The Fort William smelter, which is the last of its kind in the UK, has been owned by GFG since 2016 and is part of its Alvance aluminium division.
Last week Lochaber Chamber of Commerce chief executive, Frazer Coupland, said he had been given assurances by local management that operations were continuing as normal at the plant.
Mr Coupland described the smelter and its associated hydro-power operation as a “critical part” of the community.