Mumbai: Sanjeev Gupta’s business group – the Gupta Family Group (GFG) Alliance, of which Liberty House is a part – has announced acquisition of bankrupt Adhunik Metaliks and Zion Steel in a ₹425 crore ($60 million) cash deal.
The transaction marks GFG Alliance’s entry into India.
In a press release, the group said it would introduce its greensteel model--combining steel recycling with low carbon and renewable power sources--to revive the steel plants.
Having failed to acquire Adhunik in its first attempt, Liberty House was given a second chance by the National Company Law Appellate Tribunal, India’s top bankruptcy court, to take over the steel mill, pulling it back from liquidation orders.
Adhunik and Zion had total outstanding debt of more than ₹5,000 crore.
Adhunik is an integrated steel plant located at Chadrihariharpur near Rourkela in Odisha. The plant has both blast furnace, and electric arc furnace-steel making capacity of 0.5 million tonnes per annum, and a 34 MW captive power plant.
Adhunik along with Zion Steel, its associated steel rolling facility, has a combined rolling capacity of 400,000 tonnes per annum. The sites produce products for the automotive, energy, engineering and oil and gas sectors.
GFG Alliance said the immediate focus will be on reviving and restoring the facilities and operations, and once stabilized, the business will begin its integration into the Liberty Steel Group.
In October 2019, GFG Alliance had announced the consolidation of its steel businesses into one global entity – the Liberty Steel Group, the 8th largest steel producer in the world outside China, with operations in 200 locations in ten countries.
Commenting on the acquisition, Sanjeev Gupta, the Indian-born British businessman and executive chairman of GFG Alliance, said, “Today marks an important milestone in our global steel strategy with the purchase of Adhunik Metaliks and our entry into India – one of the fastest growing and most vibrant steel markets in the world. It has been a challenging journey to get us to this stage, but we now look forward to starting work in partnership with all stakeholders to revive these plants and bring employment back."
