The owner of the Georgetown mill, Liberty Steel, said on Tuesday that it has enough money to continue operating in the short term after the collapse of its main financier.
Greensill Capital filed for insolvency in Britain on 8 March. Customers of the London-based company included the GFG Alliance, the owner of Liberty Steel, based in the United Kingdom, which has operations worldwide.
“We have adequate funding for our current needs while filling the gap to refinance the business,” said Sanjeev Gupta, the billionaire owner of the GFG Alliance, in a written statement.
Gupta sought to ease the concerns of metalworkers after Greensill announced that he was looking for the equivalent of England’s bankruptcy. Greensill said in a lawsuit that GFG Allliance has begun to default on its debts.
“Securing alternative long-term financing is progressing well, but it will take some time to organize,” according to Gupta’s statement.
Financial problems are unlikely to have an immediate impact on the Georgetown mill, which has been idle for almost a year after a drop in steel demand during the COVID-19 pandemic. The site also needs a new electric arc furnace, which would cost about $ 25 million, and other upgrades.
Liberty Steel spokesman Andrew Mitchell said other operations at the South Carolina wire rod plant are unsustainable in their current condition. He told the Post and Courier last month that there was no change in the situation after about 130 workers were laid off last year. A small team remained at the factory to oversee maintenance.
Greensill’s collapse came after the financial services group said it lost insurance for its debt repackaging division. Without such coverage, the company said, it would no longer be able to sell debt-backed securities to investors.
Liberty Steel bought the assets of the 51-year-old Georgetown plant in 2017 from ArcelorMittal and restarted the Front Street plant in June 2018. It never reached full production before what it called a temporary shutdown in April 2020. The company recently got it right two lawsuits filed by suppliers who said they were not being paid.
Liberty Steel, which has some 5,000 employees abroad, also operates an old steel plant with an electric arc furnace in Illinois. The GFG Alliance has more than 200 manufacturing sites in 12 countries, focusing on a variety of businesses, from steel mills to bicycle manufacturers, which employ around 35,000 workers.
News agencies contributed to this report.
Talk to David Wren at 843-937-5550 or on Twitter at @David_Wren_