Liberty Steel USA, a division of troubled Indian-British steelmaker GFG Alliance, said Tuesday it had secured new funding as part of the parent group’s restructure.
Private equity firm Eclipse Business Capital has agreed to inject $125 million (£96 million) into the American unit, GFG said in a statement.
Indian-British billionaire Sanjeev Gupta’s GFG Alliance and its UK arm Liberty Steel is undertaking a drastic overhaul after the collapse of its main lender Greensill last year.
“The refinancing of our Liberty Steel USA business is further confirmation of rising confidence in our restructuring plan, our transformation strategy and the quality of our US operations,” said Liberty Steel Group’s chief restructuring officer Jeffrey Stein.
“The strength of our international asset base is supporting our efforts to stabilise, refocus and refinance our operations, which are gaining momentum.”
Strong steel prices have helped Gupta’s sprawling business to offset the impact of surging energy costs this year.
Gupta was once seen as the saviour of British steelmaking.
However, since the collapse of Greensill, which specialised in short-term corporate loans via a complex and opaque business model, GFG has scrambled to cut costs in order to survive.
Liberty launched a restructuring plan one year ago that includes the sale of some British assets, but it also injected £50 million into the business.
“We’re… taking the necessary steps to close or divest non-core businesses,” Stein added in Tuesday’s statement.
“However, for high potential but non-core businesses such as our super alloys speciality steel division in the UK, we are restructuring them to make them leaner and more competitive.”
GFG Alliance is under investigation for fraud and money laundering in its business activities, including in connection with Greensill.
