Firms ‘laughing all way to bank’ over smelter, says Rennie
An international group of businesses has seen the value of a Scottish smelter they purchased increase by more than £100 million, while making very little investment, Scottish Liberal Democrats have claimed.
The party's economy spokesman, Willie Rennie, said that GFG Alliance - a collection of businesses in energy, steel and trading centred around businessman Sanjeev Gupta - paid £330m in 2016 for the aluminium smelter and its associated works in Fort William.
The smelter and its assets, including land and a hydroelectric plant providing the smelter's power, are currently valued at £438m - a gain of £108m.
When the smelter was bought, the Scottish Government backed it with a guarantee nominally valued at £586m.
Mr Rennie said: "GFG Alliance is laughing all the way to the bank with the Lochaber smelter deal with the SNP Government.
"GFG bought Lochaber for £330m but the assets have now been valued at £438m, with very little investment or effort from the company.
"That's quite a return on their investment, which was backed by a £568m SNP Government guarantee."
Details from a Freedom of Information request show that in return for the guarantee, Liberty Aluminium Lochaber Ltd, part of GFG Alliance, pays the Scottish Government a commercial fee.
The FOI says: "Since 2016, Liberty Aluminium has fulfilled all its power purchase and guarantee fee obligations, and there has been no call - and therefore no resulting public expenditure - against the Scotguarantee tish Government guarantee."
The FOI says that Liberty Aluminium Lochaber Ltd annually pays the Scottish Government between £14m and £28m for the life of the guarantee.
A Scottish Government spokesperson said: "The Scottish Government's guarantee helped secure the future of the businesses at Lochaber.
"They are now operating profitably and have created 40 new jobs since 2016, increasing direct employment in the complex to 200 jobs while supporting a valuable supply chain with hundreds of associated jobs.
"The business remains committed to investment in the long term future of the site.
"There has been no call on the guarantee and the value of the security package held by the Scottish Government in relation to the Lochaber
exceeds its financial exposure according to Treasury Green Book analysis prepared by independent advisers.
"The net present value of the remaining power purchase agreement revenue stream over the remaining 20 years is £286m, while the companies' valued the assets at Fort William at £438m in their 2019 accounts."
A GFG Alliance spokesperson said: "The Lochaber aluminium smelter remains a profitable operation.
"GFG Alliance's continuing commitment to the operations and to investing in a new recycling and aluminium billet plant will secure their longerterm future, create new high qualityemploymentinthearea and provide opportunities for the local supply chain.”