Liberty walks away from Dunaferr talks

Liberty Steel has withdrawn from takeover talks with Hungarian steelmaker Dunaferr, sources close to the situation told Argus.

They suggest the move could be driven by Liberty lender Greensill Capital's reported financial difficulties and Liberty having issues securing funding elsewhere. Equity group Brookfield has walked away from financing talks with the company, according to the Financial Times.

Senior Liberty executives, led by Paramjit Kahlon, wrote a positive report on Dunaferr after conducting due diligence on the plant. A little under a month ago, Hungary's minister of foreign affairs and trade, Peter Szijjarto, and Sanjeev Gupta, of Gupta Family Group (GFG) Alliance, the holding company that owns Liberty, were in negotiations with a view to concluding the deal, but the company then went off radar.

"GFG Alliance has adequate current funds, and its plans to bring in fresh capital through refinancing are progressing well," a spokesperson told Argus. "We are benefitting from a recovery in steel and aluminium markets, which means that most of our businesses are running at near-full capacity to meet high demand and are generating positive cash flows."

On the back of this news today, European buyers today began to air concerns about supply from Liberty, with some having just finalised renegotiations for hot-dip galvanised coil from Liege Dudelange, after the company cancelled contracts and tried to push up prices given disruption to feedstock supply.

By Colin Richardson