December 3, 2018 / 12:38 PM / 10 months ago

Industrialist Sanjeev Gupta buys U.S.-based KCI for $320 million

Sanjeev Gupta, executive chairman of Liberty House Group, listens to the speaker at the completion of a 330 million pound deal to buy Britain's last remaining Aluminium smelter in Fort William Lochaber Scotland, Britain December 19, 2016. REUTERS/Russell Cheyne

LONDON (Reuters) - British industrialist Sanjeev Gupta’s privately owned GFG Alliance has signed a deal to acquire U.S.-based steel wire producer Keystone Consolidated Industries (KSI) for $320 million.

The GFG Alliance, whose assets spans industrials group Liberty House and energy group SIMEC, is a growing commodities conglomerate that been snapping up distressed steel, aluminium and energy assets around the world.

In October, it bought steel plants in the Czech Republic, Romania, Macedonia and Italy from top global steelmaker ArcelorMittal (MT.AS) in a deal that doubled its worldwide steel-rolling capacity to 15 million tonnes.

It also owns a U.S.-based steelworks in Georgetown.

Some investors have questioned the extent of Gupta’s funds, and his cashflow. GFG has said its accounts show core earnings of $500 million in 2017, versus $165 million a year earlier.

It said the KCI deal, which will take its total U.S. steelmaking capacity to 1.8 million tonnes, is financed by an asset-backed loan from two North American banks and a term loan from BlackRock Financial Management Inc.

“GFG will contribute equity and its unencumbered Liberty Steel Georgetown plant to the transaction,” the company said in a statement.

GFG was advised by Deutsche Bank Securities Inc. (DBKGn.DE), Wyelands Capital and Norton Rose Fulbright on the KCI transaction.

Reporting by Maytaal Angel; Editing by Richard Balmforth

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