Lochaber Smelter owner, GFG Alliance, has announced a £50million cash injection is being made by its Liberty Steel division, which will safeguard hundreds of jobs in the UK.
The move, affecting Liberty’s steel plant in Rotherham, is part of a wider restructure of GFG, which was forced to seek funding when its main lender, Greensill Capital, collapsed.
The cash will allow the South Yorkshire plant, which has been closed since spring, to reopen.
And the group said it has agreed debt restructuring for its Liberty Prime Metals Australia arm with Credit Suisse Asset Management.
GFG’s chief restructuring officer, Jeffrey S Stein, said: “I’m pleased to report a significant advance in GFG Alliance’s global restructuring.
“The debt restructuring we have agreed for Liberty Primary Metals Australia gives the business clarity and stability and secures a clear recovery plan for creditors.
“The funding we are injecting to Liberty Steel UK puts it in a strong position for business transformation and debt restructuring.
“The next stage in our global refinancing will be in Europe where a significant number of new lenders are expressing interest in refinancing our steel assets.”
GFG Alliance executive chairman, Sanjeev Gupta, added: “I’d like to thank all our stakeholders – government, union representatives, customers, suppliers and of course our employees and the local community – for the support they’ve shown GFG Alliance as we managed our way through the challenges created by the Greensill collapse.
“At the same time GFG’s injection of funding to restart the Liberty Steel UK operations is an important step on our road to creating a sustainable UK business.
“It will allow time to prove the operations can run efficiently which will enable us to finalise longer debt restructuring.”
A GFG spokesman said the refinancing would have no impact on the Lochaber Smelter, at Fort William, which is part of the group’s Alvance aluminium division.
Last week the group issued a statement saying it was preparing to launch legal action against any attempt by US private equity fund AIP to seize control of the Dunkirk aluminium smelter, in France, which is also part of Alvance.
Earlier in the year, AIP bought out a portion of the Alvance’s debts from its previous lenders.
In July GFG announced it had reached a full commercial arrangement between Alvance and a leading international metal market business and said that, as part of the deal, the un-named company would repay AIP in full.
Last month Highland Council approved plans by the group to build a £94m aluminium recycling plant next to the Fort William smelter.
The casting factory will use the recycled material and metal from the smelter to produce up to 100,000 tonnes annually of long round shapes called billets for use in the construction industry.