Arch-rivals Glencore, Trafigura alliances to support GFG’s aluminium arm with $450 million lifeline deal

The Indian-born, British metal tycoon Sanjeev Gupta owned GFG Alliance has reportedly signed a loan deal with commodities giants Glencore and Trafigura to safeguard its aluminium division from emerging to collapse.

As the report, the Anglo-Swiss multinational commodity trading and mining company, Glencore would disburse a six-year loan to acquire the maximum of the outstanding debt of Alvance Aluminium’s smelter in Dunkirk, France, and an associated aluminium rolling mill in Duffel, Belgium.

The commodity company will also assist with selling aluminium products, with the two merchants both supplying raw materials.

As per a spokeswoman of the Swiss multinational commodity trading company, Trafigura has confirmed the outline of the deal and the amount could settle up to $450 million.

Sanjeev Gupta said: “The group was targeting an amicable settlement of their debts using the facilities agreed with Glencore.”

This lifeline deal would deliver the distressed metal magnate the financial firepower to see off a buy-up offer from American Industrial Partners (AIP), brokered by his top aide Jay Hambro, who would have left to join the US private equity firm, while it has been reported that the knock-down deal has caused a rift between the pair.

Since the collapse of GFG’s primary lender Greensill Capital in March, Mr Gupta has been fending off creditors and in the UK his company is being investigated by the Serious Fraud Office.

As the global economy is on the path to recovery, the metal aluminium which is required in the making of beverage cans to aeroplane parts has soared by 24% in 2021 to almost $2,500 a tonne.

It needs to be also notified that Sanjeev Gupta still has to refinance huge debts on his European steel assets, which might be more complex.

GFG Alliance earlier said: “GFG continues to focus on the restructuring and refinancing of its businesses following the collapse of Greensill Capital. The Alvance portfolio is performing well supported by strong market conditions.”

Glencore’s deal with GFG would be accomplished under the commodity trading company’s new CEO, Gary Nagle, who took the charge of the commodity trading business, a few days back following Ivan Glasenberg retirement.

The alliance between arch-rivals for three decades, Glencore and Trafigura to support GFG Alliance has sent a shocking message to the global metal and commodity industry.