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Liberty House seals funding agreement to buy Rio's French aluminium smelter

Aditi Divekar/Mumbai 09 Nov 18 | 08:11 PM

At a time when UK-based Liberty House is looking to have a sizeable presence in India's steel market, it continues to make acquisitions in other geographies.  

The Sanjeev Gupta-led steel company on Friday said it has sealed a committed financing agreement to acquire Europe's largest smelter at Dunkerque in France.   

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GFG Alliance, of which Liberty House Group is a part, has announced its entry 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.      

The term loan secured on standard financial terms provides five-year committed funds, it said in a release.

"This now clears the way for the eagerly-anticipated deal on the 560-worker site to be formally completed before the end of November following the completion of closing mechanics," it said. 

ALSO READ: CCI approves Liberty House's acquisition of debt-laden Amtek Auto

Friday's announcement follows extensive talks over recent months aimed at securing the French government's approvals, long-term power price contracts and robust measures to protect the business in the face of aluminium market turbulence, arising in part from US sanctions against Rusal and the closure of a major alumina refinery in Brazil.  

Sanjeev Gupta, executive chairman of the GFG Alliance, was quoted as saying, "This transaction 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."

ALSO READ: Amtek lenders mull new bidder after Liberty House misses repayment deadline 

After completion, Liberty intends to make substantial investments in the flagship plant, making it the cornerstone of a major integrated manufacturing business, producing metals and components for the automotive and other growing industries in France. As part of this, Liberty recently acquired the aluminium wheels factory at Chateauroux in central France.

Meanwhile, in India, Liberty House has bagged insolvent Amtek Auto and Adhunik Metaliks in a bid to create a presence in the country's growing steel industry. It is also bidding for Bhushan Power & Steel along with domestic steel majors such as Tata Steel and JSW Steel.     

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