Mumbai: Liberty House, the London-based metals group founded by India-born billionaire Sanjeev Gupta, plans to build a steel plant in place of the existing ship-building facility if its bid to buy troubled ship maker ABG Shipyard is accepted. Gupta’s Liberty House has placed a bid of ₹ 5,200 crore for ABG Shipyard, which owes close to ₹ 19,000 crore to creditors.
In the three rounds of bidding held for this asset, Liberty House has emerged as the sole bidder. The company’s resolution plan for the ship builder is pending at the Ahmedabad bench of the National Company Law Tribunal (NCLT).
In a 22 August interview, Gupta said that if Liberty House were to win the asset, he would re-purpose the facility to recycle metal scrap.
As it stands now, Gupta said, “ABG is a junkyard. It has been vandalized and now you will only find stray dogs there. The shipbuilding business is not something we’re planning on. The yard is well-located; it’s got a good shiplift. It can be used for breaking ships for scrap and that serves our green steel (recycled steel) objective. The business model we have in mind is completely different. ABG is a difficult asset and we are looking at the long-term play of making it into a steel plant. Building ships is not a viable business here, that’s why shipyards are in the doldrums in India.
“But the steel plant will take years to build,” Gupta added. “If (our bid) gets through, fine. Otherwise, it’s not a core part of our overall gambit in India.
Liberty House has come to India with an investment plan of anywhere between $5-10 billion, which includes buying out a range of distressed assets, de-bottlenecking them and ramping up production capacities at the plants he buys out.
“Of the businesses we have bid for, only ABG will be re-purposed,” Gupta said. “Amtek Auto will continue to be an auto play. Adhunik Metaliks will focus on alloy steels that will feed into Amtek and other steel component producers. If we win Bhushan (Power & Steel Ltd), that will be the start of our primary steel business. Each of these will be independent businesses and will work at arm’s length from each other.”
In July, the Chandigarh branch of NCLT approved Liberty House’s ₹ 4,400 crore resolution plan for Amtek Auto while the Kolkata bench of the court approved the company’s ₹ 600 crore takeover of Adhunik Metaliks. The company is also bidding for Castex Technologies, Metalyst Forgings and Amtek Ring Gear, all subsidiaries of Amtek Auto.
“We have come to India with a string-of-pearls strategy,” Gupta said. “If we don’t win one asset, we’ll go for another one. We’re only one-third of the way on our Indian journey. We’re looking at opportunities in the next round of distressed assets as well. Every steel asset at NCLT or anything on its way to NCLT is under our radar.”
In the past, Gupta has spoken about his ambitions to build electric vehicles (EVs) in India. On this subject, he said: “We’re launching EVs in Australia, the UK and maybe in India. But EVs don’t need the components that are currently made in India. It doesn’t have the traditional engine. The car body components are also different, with composite panels instead of the traditional stampings and so on. Our EV plan for India is not fully baked yet. It’s much more advanced for us in other parts of the world, but India will follow.”
Instead, his firm is going to focus sooner on getting into the hotly contested renewables energy business in India. Last week, Gupta’s energy firm Simec Zen announced the launch of a $1 billion, 1 gigawatt renewable energy plan in Australia’s Spencer Gulf region in Southern Australia.
“We’re looking at greenfield projects in renewable energy in India as well, particularly in solar. We’re looking at tenders, we’ve started to put together a team in India, we’re toying with the idea of bidding,” Gupta concluded. “For us, globally, the heavy industries business will continue, but renewables is going to be a key sector.”