Liberty House secures financing to acquire Rio Tinto's aluminium smelter in France

12 November 2018

The UK-based metals group Liberty House on Friday announced that it has secured financing from a group of international banks for the purchase of Rio Tinto's aluminium smelter in Dunkirk in France.

"British-owned Liberty, part of Sanjeev Gupta’s global GFG Alliance, has announced today (9 November) that it has entered into a committed financing agreement with a syndicate of major international banks for the purchase of Aluminium Dunkerque, Europe’s largest aluminium smelter from Rio Tinto," a release by the company said.

The announcement comes after ET reported on Monday that the company has sought extension from Indian banks to pay a total of Rs 4,810 crore- the amount it owes to lenders from which it has acquired stressed assets Amtek Auto and Adhunik Metaliks under the insolvency law in India.

The loan for the aluminium smelter which the company has received the commitment has been secured on a "standard financial terms" and provides funds for five years, the company said.

The move now clears the way for the deal for which the company had made a $500 million binding offer in January that will give it the ownership of Europe's largest aluminium smelter as well as mark its foray into investing in France.

“I’m very pleased to have completed this committed facility with a broad range of leading banks allowing Liberty to complete this landmark transaction. It allows us to press ahead with our plans to develop Dunkerque, to expand production and create added-value downstream operations. This agreement underlines the support of the banking community for GFG’s vision for economic and environmental sustainability," executive chairman of GFG Alliance, Sanjeev Gupta said in the release. GFG Alliance is the $10 billion parent group of Liberty House.

Gupta plans to use the smelter to produce aluminium for an integrated manufacturing business engaged in the production of components for the automotive and other growing industries in France. It also recently acquired the aluminium wheels factory at Chateauroux in central France.

Back home in India, the company has bid for multiple assets under the newly constituted Insolvency and Bankruptcy Code to get a foothold in the Indian steel market. Under the law, it has already bagged auto components maker Amtek Auto and steel company Adhunik Metaliks. It has also bid for ABG Shipyard but its bid for the asset has been rejected twice and is still awaiting a final order. Its largest bid (Rs 18,500 crore) has been for Bhushan Power and Steel where the company has locked horns with India's largest steelmakers- Tata Steel and JSW Steel. The court is yet to deliver its final verdict on the asset.