GFG launches legal action against US private equity fund AIP
GFG Alliance has announced that it will take legal action against any attempt by US private equity fund AIP to take control of the Dunkirk aluminum smelter which is part of GFG’s ALVANCE business.
In July, earlier this year, AIP bought out part of ALVANCE’s debts from its previous lenders. Preliminary discussions were also held between GFG and AIP regarding a possible future sale of these assets, but these discussions were quickly ended due to some concerns about the negotiations.
Along with the end of negotiations with AIP in July 2021, GFG announced a full commercial agreement between ALVANCE and a leading international company in the metals market. As part of this agreement, the international partner has undertaken to reimburse AIP in full and to provide additional support for ALVANCE’s activity.
Despite this development and GFG’s efforts to reimburse AIP for the debt it held, AIP has taken steps to acquire Dunkirk’s mezzanine debt on the secondary debt market. This would have been despite the fact that funds to repay the AIP had been available since July 2021.
AIP refused to repay, buy third party debt or third party refinancing of GFG.
GFG acquired the Dunkirk aluminum foundry in 2018 and integrated the company into ALVANCE thus creating a leading integrated European aluminum company. Since the acquisition, GFG has invested more than US $ 100 million in building the business, protecting nearly 1,000 jobs and tripling EBIDTA.
Commenting on GFG’s position, GFG Executive Chairman Sanjeev Gupta said:
“AIP has resisted all of GFG’s efforts to fully repay its debt, but they claim GFG is in default. It is a cynical and predatory effort to try to acquire our business on the cheap. We will fight against this with all our efforts to ensure that Dunkirk remains within our international steel and aluminum group and is able to execute our long-term strategy, for the benefit of all its stakeholders. Our employees, customers and suppliers deserve better and, reinforced by our commercial agreement with a leading partner, we remain committed to the reindustrialisation of France.
Sanjeev Gupta, Executive Chairman of GFG
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