06 Jul UK consortium purchases struggling Arrium outbidding South Korean group
UK-based consortium GFG Alliance has announced it has signed a binding purchase agreement for financially troubled Australian steel company Arrium, outbidding an interested South Korean group in the process.
The binding purchase agreement with GFG comes as a surprise, as a Seoul-based private equity syndicate led by Newlake Alliance and JB Asset Management was chosen as the preferred bidder last month.
However, the UK consortium led by entrepreneur Sanjeev Gupta, executive chairman of industrial turnaround company Liberty House, trumped the Korean bidders.
Arrium collapsed in April 2016 with a US$2.13 billion debt burden after creditors rejected a $927 million bailout proposal by private equity group GSO Capital Partners.
The group aims to modernise Arrium’s aging steelworks along with its mining and steel distribution businesses, after it folded amid a sustained downturn in the steel and iron ore markets.
“We aim to leverage the advantages of integration across the value chain, from raw materials and metal production to high-end engineered products,” said Gupta after the deal was agreed.