Lochaber Smelter’s crisis-hit owner, GFG Alliance, has announced a major restructuring of its steel business.
The group said the move, which includes the replacement of Liberty Steel’s managing director, would “pave the way for a refinancing,” which will enable it to pay back creditors following the collapse of its main lender, Greensill Capital.
Group chief restructuring officer, Jeffrey S Stein, said: “We are aware of the significant challenges facing the group but are pleased that we are making good progress to refinance, repay creditors and refocus the group on our core assets.
Much remains to be done but we are optimistic that a vibrant, well-funded, profitable and sustainable business will emerge as we systematically restructure and transform the group.”
Liberty Steel’s UK managing director, Jon Ferriman, will step down on Friday, while Roy Chowdhury, a turnaround and industry expert, will be appointed chief executive.
The company is still looking for a buyer for its UK aerospace and special alloys steel plant that it owns in Stocksbridge, near Sheffield.
Executive chairman, Sanjeev Gupta, said: “Despite the difficult circumstances, GFG Alliance contains many high quality businesses which are performing strongly in record markets where customer demand and pricing are strong.
“By refocussing our businesses, we will protect more jobs and lay the foundations for future sustainable growth.
“The refinancing of the group, which is progressing well, brings closer the point of being able to honour our obligations to creditors.”
New investigation launched
An investigation has been launched into auditors for Wyelands Bank, owned by Mr Gupta and closely linked to Greensill, which went bust earlier this year.
The accounting regulator, the Financial Reporting Council (FRC), will investigate the role of Big Four accounting giant PwC in relation to its audit of the bank for the year ending April 30 2019, it said.
Wyelands Bank was forced by the Bank of England to repay all depositors £210 million due to concerns over how it was funding GFG Alliance.
Wyelands is currently on the verge of collapse after Mr Gupta said he was pulling funding from the bank having handed them a £75 million loan in a year earlier.
Last 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.
