LIBERTY Steel Reached Agreement with its Largest Creditor

SEATTLE (Scrap Monster): Sanjeev Gupta-owned LIBERTY Steel announced that it has reached a standstill agreement with its largest creditor Greensill Bank AG on debt facilities for its European arm. The deal would be valid until October 13^th and could be extended to end-2022, said the company. It must be noted that the bank had held majority of the $5 billion of loans received by the company.

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The deal is likely to provide a breathing room for GFG Alliance-LIBERTY Steel’s parent, which seeks to find fresh financing. The company has been starving for cash to run the European businesses after Greensill Capital filed for insolvency in March 2021, following refusal to renew its cover by one of the primary insurers. The collapse had even forced GFG Alliance to sell two of its steel plants in France.

The company statement clarified that the standstill deal would pause all enforcement actions until the end of October this year, although it did not clarify about the details of the debt facilities. The company is in efforts to reach a settlement with all its major creditors in a timeframe so as to avoid the need for a legal battle.

The agreement with Greensill Bank AG is an indication that the company is getting close to a consensual debt restructuring that would be in the best interest of all its stakeholders.