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Sanjeev Gupta-led GFG Alliance buys steel wire maker KCI for $320m

Deal Street Asia 2018-12-03 20:52:48

Industrialist Sanjeev Gupta-led GFG Alliance buys steel wire maker KCI for $320m

Photo: Reuters

British industrialist Sanjeev Gupta’s privately owned has signed a deal to acquire U.S.-based steel wire producer for $320 million.

The GFG Alliance, whose assets spans industrials group Liberty House and energy group SIMEC, is a growing commodities conglomerate that been snapping up distressed steel, aluminium and energy assets around the world.

In October, it bought steel plants in the Czech Republic, Romania, Macedonia and Italy from top global steelmaker ArcelorMittal in a deal that doubled its worldwide steel-rolling capacity to 15 million tonnes.

It also owns a U.S.-based steelworks in Georgetown.

Some investors have questioned the extent of Gupta’s funds, and his cashflow. GFG has said its accounts show core earnings of $500 million in 2017, versus $165 million a year earlier.

It said the KCI deal, which will take its total U.S. steelmaking capacity to 1.8 million tonnes, is financed by an asset-backed loan from two North American banks and a term loan from BlackRock Financial Management Inc.

“GFG will contribute equity and its unencumbered Liberty Steel Georgetown plant to the transaction,” the company said in a statement.

GFG was advised by Deutsche Bank Securities Inc., Wyelands Capital and Norton Rose Fulbright on the KCI transaction.

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