Trafigura confirms participation in refinancing GFG aluminum unit

Global commodities trader Trafigura confirmed in a July 12 email that it is involved in a debt refinancing arrangement with GFG Alliance's aluminum subsidiary Alvance Aluminium.

The refinancing is reportedly part of a move to ensure the continued smooth operation of the aluminum complex following the collapse of GFG Alliance group's major financier, Greensill Capital, in March.

While full details have not been released, informed sources told S&P Global Platts that Trafigura will continue to supply alumina as a raw material for Alvance's Dunkirk smelter in France under contract.

The sources added that trader Glencore has purchased Trafigura's debt in the Dunkirk smelter.

Bloomberg News on July 9 cited people familiar with the matter as saying that Glencore has sought to buy about $230 million in Dunkirk's debt from Trafigura and BlackRock.

Glencore last week declined to comment on any debt refinancing at the GFG aluminum operations, and did not immediately reply to emailed questions seeking further clarification July 12.

A GFG Alliance spokesperson declined to comment July 12 on the contents of an internal GFG note sent out to senior employees July 9. A previous statement said: "GFG continues to focus on the restructuring and refinancing of its businesses following the collapse of Greensill Capital. The Alvance portfolio is performing well supported by strong market conditions."

The LME cash aluminum price was quoted July 12 at $2,496/mt, near a three-year high.

Alvance has three major sites -- smelters Alvance Aluminium Dunkerque in northern France and Alvance British Aluminium in Lochaber, Scotland, and downstream products producer Alvance Aluminium Duffel in Belgium. The group's total aluminium products production capacity is put at nearly 600,000 mt/year currently.

Three smaller French units of Alvance Aluminium entered judicial administration late April.