GFG Alliance Applies To Purchase Bayou Steel In USA

GFG Alliance Liberty subsidiary BSG Holdings Inc is set to pay US $ 28 million for Bayou Steel with plans to reopen a closed Louisiana steel mill. On December 21, a US court announced the bankruptcy of Bayou Steel Black Diamond and that it had selected Liberty as the winner of the tender. Delaware bankruptcy judge Karen B. Owens said at a hearing on December 23 that she intends to approve all cash offers from Liberty BSG Holdings Inc following minor changes to the sales order. Liberty said its deal is expected to close on January 31st. She plans to modernize the plant at LaPlace and hopes to resume refining in the second half of 2020 and steel production by 2021.

However, the offer is contested by Black Diamond Commercial Finance, the lead debtor and subsidiary of the original Bayou Steel owner Black Diamond Capital Management, which made a $ 33.5 million bid for Bayou Steel. BDCF stated in court hearings: "Under the control case, BDCF cannot be forced to accept less than the full amount of its secured claim."

Bayou Steel, a quality retail bar maker, closed abruptly in October at a short ton per year. Bayou Steel Group announced layoffs and closings on September 30th. The next day, it announced that it was filing for Chapter 11 bankruptcy protection. The company operated a 595,000 short tons /year electric arc furnace and MBQ mill at LaPlace in Louisiana, which produced steel beams, wide flange beams, channels and corners. The company also operated a 237,000 tpa rolling mill in Harriman, Tennessee.

Liberty, part of the global GFG Alliance, is actively engaged in US purchases as the company grows its US presence to 5 million short tons per year. In 2018, Liberty acquired and resumed production of wire rod in Georgetown, South Carolina. In 2019, it acquired wire rod and rebar manufacturing company Keystone Consolidated in Illinois for US $ 320 million. The Bayou Steel acquisition will bring Liberty up to 3 million tonnes of US steel per year.