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• GFG Alliance agrees debt restructuring for LIBERTY Primary Metals Australia with Credit Suisse Asset Management
• GFG Alliance to inject 拢50 mn of new funding to relaunch Rotherham (UK) production
• European and US businesses continue to perform strongly

Following the creation of LIBERTY Steel Group鈥檚 Restructuring and Transformation Committee (RTC) in May 2021 and the sustained progress achieved to date, GFG Alliance (GFG) and the RTC today report further developments across the Group.

Jeffrey S. Stein, Chief Restructuring Officer said: 鈥�I鈥檓 pleased to report a significant advance in GFG Alliance鈥檚 global restructuring. 天博体育官方网站 debt restructuring we have agreed for LIBERTY Primary Metals Australia gives the business clarity and stability and secures a clear recovery plan for creditors. 天博体育官方网站 funding we are injecting to LIBERTY Steel UK puts it in a strong position for business transformation and debt restructuring. 天博体育官方网站 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.鈥�

Jeffrey Kabel, Chief Transformation Officer, said: 鈥�天博体育官方网站 injection of 拢50 million of shareholder funds into LIBERTY Steel UK is an important step in our restructuring and transformation. It will help to create sustainable value, ensure that LIBERTY has the ability to raise and deploy capital quickly in the UK and enable our businesses to demonstrate their potential and agree long term debt restructuring.鈥�

Actions taken

Australia

Marking a significant step forward on GFG鈥檚 path to recovery following the collapse of its main lender Greensill in March, GFG and Credit Suisse Asset Management (CSAM) have agreed a debt restructuring for LIBERTY Primary Metals Australia (LPMA), which comprises its integrated mining and primary steel business at听Whyalla听and its coking coal mine at听Tahmoor.

天博体育官方网站 deal will provide a stable financial platform for our LPMA business and secures a recovery plan for creditors. LPMA has registered record-breaking performances following its operational efficiency drive, continuous improvement initiatives and favourable market conditions underpinned by strong investment in infrastructure.听Continued strength in the steel and coking coal markets has helped to offset the recent correction in iron ore prices.

天博体育官方网站 strength of the LPMA business will enable it to make a substantial upfront payment to Greensill Bank and CSAM, which has been closely involved in GFG鈥檚 work to refinance and restructure its portfolio following the collapse of GFG鈥檚 main lender Greensill Capital. Under the agreement, which represents the best of several options open to LPMA to achieve refinancing, the balance will be paid in instalments to CSAM and Greensill Bank, through the amended maturity date of June 2023.

UK

GFG will inject 拢50 million of new funding into LIBERTY Steel UK (LSUK) to enable the restart of LSUK鈥檚 core Rotherham electric arc furnace. 天博体育官方网站 provision of funding will set the platform to refinance LSUK operations in full, create a leading long-term GREENSTEEL hub, and support the RTC鈥檚 work of creating a profitable, restructured and focused business.

Funds will be allocated to LSUK through a new separate corporate entity LIBERTY Capital. LSUK will run as normal with funding for growth in working capital approved through LIBERTY Capital. This arrangement will ensure fast and effective deployment of the 拢50 million in initial funds in the UK, enabling LSUK to restart its operations. This will allow time to prove the operations can run efficiently which will enable them to finalise longer term debt restructuring.

Regional updates

United Kingdom

Restart and investment at Rotherham: 天博体育官方网站 capital injection from LIBERTY Capital will enable LSUK to restart production at its GREENSTEEL Rotherham electric arc furnace, where there is a significant opportunity to expand recycling of scrap steel for growth markets such as infrastructure and engineering. Production ramp up will commence in October 2021 with a plan to reach 50,000 tonnes per month as soon as possible. 天博体育官方网站 restart of operations will enable colleagues to return to work, setting the platform for LSUK鈥檚 longer term refinancing and delivery of its plan to expand Rotherham鈥檚 capacity, creating a two million tonnes per annum GREENSTEEL plant. Investment plans in Rotherham will boost production capacity, increase employment and introduce new products. 天博体育官方网站se plans have been presented to and reviewed by industry consultants on behalf of Trade Unions. A separate report was prepared by advisors to the significant lenders to the UK businesses. LSUK鈥檚 downstream operations remain core to LSUK鈥檚 asset base and will provide downstream capacity for Rotherham鈥檚 output, enabling increased shift opportunities at the Thrybergh and Scunthorpe mills.

Preparation for responsible sale of Speciality Steel (SSUK): 天博体育官方网站 injection of funding announced today will also enable LSUK鈥檚 speciality steel division SSUK (Stocksbridge, Narrow Strip, Performance Steel), which produces steel components for demanding aerospace and energy applications, to run focussed production campaigns for key customers. This will support business continuity, establish a stable operating environment and create an attractive asset.

Europe

In Romania, for the quarter ended 30 June 2021, LIBERTY Galati achieved EBITDA of EUR 84 million, up more than 60% on the previous quarter, the best quarterly result since 2008.听 天博体育官方网站 plant reported strong growth in turnover of EUR 492 million, up 37% on the first quarter ended 31 March 2021, from shipments of around 566 KT, 7% more than in Q1. 天博体育官方网站 business is currently in the process of increasing its production towards 3 million tonnes for the year, up from around 2 million in 2020.

In the Czech Republic, for the quarter ended 30 June 2021, LIBERTY Ostrava increased EBITDA to EUR 103 million up 35% on the previous quarter, the plant鈥檚 best quarterly performance since 2011. 天博体育官方网站 steelworks shipped 684,000 tonnes of steel products, up 12% on the previous quarter to make it the best production quarter since 2017. Revenues generated were EUR 507 million, up 26% on Q1 2021 and more than double the same quarter in 2020. 天博体育官方网站 business is in the process of increasing its production towards 2.5 million tonnes for the year, up from around 1.7 million in 2020.

In Poland, LIBERTY Cz臋stochowa achieved positive EBITDA of 鈧�7.1 million for July, and the plant鈥檚 highest monthly production levels since 2017. 天博体育官方网站 GREENSTEEL plant produced more than 57,000 tonnes of slab in July, up from only 16,000 tonnes in January, while the rolling mills increased their production of heavy plate up to 42,000 tonnes in July from 12,000 tonnes in January.

In Italy, the LIBERTY Magona mills have now fully restarted following the initial aspects of the integration into LIBERTY Galati, which is now Magona鈥檚 primary supplier of Hot Rolled Coil.

In the Benelux, the management of LIBERTY Li猫ge-Dudelange have informed the works council of LIBERTY Li猫ge, which comprises two plants in Fl茅malle and Tilleur, of the main aspects of a possible future organisational structure. 天博体育官方网站 potential new structure has been identified as offering the best long-term future for the company, making it more likely that potential investment will be obtained to support this future. 天博体育官方网站 proposed restructuring project has no impact on the LIBERTY Dudelange site in Luxembourg, which is expected to restart shortly.

United States

LIBERTY Steel US results for the half year ended 30 June 2021 show a significant step up over the past two years. H1 earnings of $28.1m were up strongly from $5.8m last year and volumes increased by around 40,000t, buoyed by strong markets 鈥� both in the United States and globally – as economies began to rebound from Covid-19.

Pricing and margins on most steel products have been at all-time highs 鈥� HRC prices alone increased more than fourfold year on year. Economic indicators point to solid growth in the US through the rest of 2021, fuelling confidence for next year from customers in the construction, automotive, trucking, heavy and agricultural equipment sectors. A step change improvement has also been achieved in the businesses鈥� safety record. It has rolled out GFG鈥檚 leading safety indicators, including manufacturing safety and lifesaver critical risk activities, and all indicators are improved from last year with lost time injury rate down 59%.

Capital programmes have been launched to support earnings growth. Already this year the business has worked to improve reliability of Peoria鈥檚 Rod Mill, ordered three fabrication machines for Peoria Wire Products to support strength in agricultural markets, and plans are underway with a wire drawing upgrade project at Johnstown.

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Australia

天博体育官方网站 debt restructuring for LIBERTY Primary Metals Australia (LPMA), announced today follows LPMA鈥檚 record-breaking performances which saw the business grow revenues from A$1.96bn in FY 2020 to A$2.52bn in FY 2021, and EBITDA grow from A$106m in FY 2020 to A$729m in FY 2021. 天博体育官方网站 forecast for LPMA remains strong due to its ongoing operational efficiency drive, continuous improvement initiatives and favourable market conditions, underpinned by strong investment in infrastructure.

Federal Environment Minister Sussan Ley this week approved expansion of the Tahmoor coking coal mine in New South Wales. 天博体育官方网站 approval follows conditional approval granted by NSW authorities in April for a 10-year extension of the mine life at Tahmoor and will allow for the mining of an extra 33 million tonnes of high-quality metallurgical coal used in steelmaking and manufacturing.

Outlook

In response to the progress achieved by the RTC, Sanjeev Gupta, Executive Chairman of GFG Alliance, commented:

鈥�Through the hard work and determination of our team, our Australian integrated operations are now profitable and performing the best they have for many years.听 天博体育官方网站 deal we have agreed today provides a stable financial platform for our LPMA business and secures a recovery plan for Credit Suisse Asset Management and Greensill Bank following the collapse of Greensill Capital.

鈥淚鈥檇 like to thank all our stakeholders 鈥� government, union representatives, customers, suppliers and of course our employees and the local community – for the support they鈥檝e shown GFG Alliance as we managed our way through the challenges created by the Greensill collapse. I care deeply about this community and remain committed to our long-term听vision to transform Whyalla into a modern GREENSTEEL hub.鈥�听听听听听

鈥淎t the same time GFG鈥檚 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. 天博体育官方网站 plan highlights the progress we have made since Greensill鈥檚 collapse and has secured the support of both creditors and unions.

鈥淟IBERTY believes as strongly as ever that its GREENSTEEL strategy is the way to reinvent the UK steel sector for a sustainable future. 天博体育官方网站 funding commitment we鈥檙e making at Rotherham will safeguard jobs, enable us to benefit from strong outlook for our core sectors and lay the platform to create a sustainable UK business that will generate skilled jobs in industrial communities.

鈥淭oday鈥檚 agreement demonstrates GFG and CSAM鈥檚 commitment to create certainty for investors, employees, creditors and governments and to building long-term sustainable businesses. Enormous progress has been made since March and we are on track to deliver a refinanced, refocussed business able to deliver our GREENSTEEL vision and build value for all our stakeholders.鈥�

Further information from:

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Note to the editors:

GFG Alliance is a collection of global businesses and investments owned by Sanjeev Gupta and his family. 天博体育官方网站 Alliance is structured into three core industrial pillars; LIBERTY Steel Group, ALVANCE Aluminium Group and SIMEC Energy Group, independent of each other yet united through shared values and a purpose to create a sustainable future for industry and society.听GFG Alliance employs 35,000 people, across 10 countries and has revenues of USD $20bn. GFG Alliance is a leader in sustainable industry with a mission to become Carbon Neutral by 2030 (CN30).听听