American Industrial Partners buy debt of Sanjeev Gupta’s two European aluminium assets

As per industry sources, the private equity firm, American Industrial Partners has been building great industrial business for over 30 years has bought the senior debt of the two Sanjeev Gupta’s European aluminium assets, initiating the process to take over.

Recently, the New York-based firm, AIP, which seeks to invest in B2B companies in manufacturing or industrial service sectors, has bought debt linked to Sanjeev Gupta’s Dunkirk aluminium smelter in France as well as refinancing the senior debt of the Duffel rolling mill in Belgium, as reported by sources.

The founder of Liberty House Group, Sanjeev Gupta has been looking out for new financing as the metal baron struggles to safeguard his metals empire following the collapse of its biggest lender, Greensill Capital, in the previous month.

AIP’s progress to buy out other creditors at par could signal its indication to purchase the aluminium assets, either directly from GFG Alliance or after an insolvency process.

According to the court’s document: “GFG Alliance, a loose group of metals and commodity trading companies, warned in February it would face insolvency without Greensill’s funding.” Its aluminium assets are grouped under the name Alvance.

A GFG spokesperson said: “GFG Alliance can confirm Alvance Aluminium Duffel is enjoying the benefits of recent strong aluminium markets and its excellent relationships with customers. We have now completed the refinancing of its external debt facilities, with a large international lender, which will position the business for continued growth.”

However, GFG has declined to comment on Dunkirk and potential discussions to sell the plants, while AIP also kept itself away from an immediate reply.

AIP’s move caps a frenetic period of trading in debt linked to the Dunkirk plant, Europe’s largest aluminium smelter, which Gupta bought from Rio Tinto Group in 2018.

The source also added: “Several lenders including BNP Paribas SA, Morgan Stanley, Natixis SA, Industrial & Commercial Bank of China Ltd. and ICBC Standard Bank Plc have sold or sought to sell their portions of the loan in recent weeks, Bloomberg has reported. The loans were then bought at a discount by distressed debt investors including Davidson Kempner Capital Management and Triton Partners before AIP came in to buy them out at par.”

The industry professionals also highlighted, Trafigura Group has not only retained its portion of the Dunkirk loan but also added to it in recent days. This decisively indicates that the trading house could play a vital role in a future deal for the smelter, whereas Rival trader Glencore Plc has also expressed interest in the smelter.

Lately, there has been no comment from both the parties Trafigura and Glencore.

“At the same time, a senior loan of around €50 million to the Duffel plant from Tor Investment Management has also been repaid”, as per the sources.