Trafigura, Sidenor Eye Spanish Aluminum Plant on GFG’s Buy List

Trafigura Group and steelmaker Sidenor Aceros Especiales SL are among the companies that have shown interest in taking over an aluminum plant in Spain that industrialist Sanjeev Gupta was looking to add to his GFG Alliance, according to people familiar with the matter.

Alcoa Corp. has been trying to sell the aluminum smelter in Galicia, in the northwest of the country, since last year. GFG’s aluminum unit Alvance was in advanced talks with the Spanish government to take over the plant when Greensill Capital, its main financier, collapsed, casting doubt over the company’s ability to run the business.

The Spanish Ministry of Industry asked GFG in March to prove it was still solvent. Separately, the ministry told Alcoa on May 12, in a letter seen by Bloomberg News, that it should take the lead in the sale process by identifying companies interested in taking over the smelter and verifying their solvency. Under the plan, the smelter would first be sold to a government entity known as SEPI, before the private buyers would come in.

“The company has communicated there are at least six companies interested in taking over the plant,” said Raul Blanco, Spanish secretary general of Industry. “The government will subsequently support the investment of the new owner,” he added.

Companies including Trafigura and Sidenor have held talks with Alcoa about a potential deal, said the people, who asked not to be identified because the discussions aren’t public. Biscay, Spain-based Sidenor is working in tandem with Spanish power company Endesa SA, one of the people said.

“Alcoa remains committed to sell the San Ciprian aluminum plant in Spain to Sociedad Estatal de Participaciones Industriales, a government entity,” an Alcoa spokesman said in an emailed statement. “As part of that process, Alcoa has started conversations with several third-party prospects who have expressed an interest in acquiring the facility after a sale to SEPI is completed.”

Trafigura and SEPI spokespeople declined to comment. Representatives for Endesa and Sidenor did not respond to calls and emails seeking comment.

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