BackLiberty’s Gupta not keen to sell Indian assets despite hurdles
This month, the UK‘s fraud prosecutor opened a probe into Gupta’s GFG Alliance over suspicions of fraud and money laundering
PremiumMUMBAI : Sanjeev Gupta’s Liberty Steel Group, which is facing a probe in the UK over suspicions of fraud, has no immediate plan to sell its Indian steel plants even as it announced plans on Tuesday to sell one of its UK assets to repay creditors, two people aware of the development said.
Liberty Steel Group, founded by the Indian-born British businessman, has declined several offers from potential buyers for Adhunik Metaliks and SBQ Steels Ltd.
“As things stand, Liberty is holding on to the Indian steel assets possibly because of India’s growing steel demand, but that may change if things get tough and a lot depends on what kind of offers the group gets for its UK asset, which has been put on the block," said one of the two people cited above, requesting anonymity. On Tuesday, Liberty Steel said it had a very productive meeting with its lender, Credit Suisse, as part of its ongoing restructuring plans, which will result in the sale of its Stocksbridge plant in England to help repay Credit Suisse.
On Tuesday, news agency Press Trust of India reported that Gupta, who heads the wider Gupta Family Group (GFG) Alliance, and his newly formed restructuring and transformation committee held advanced discussions with Credit Suisse Asset Management in Dubai over the weekend to reach a formal “standstill agreement" on its Liberty Primary Metals Australia business, while refinancing is completed that will repay Credit Suisse out in full. As part of the pact, Credit Suisse has agreed to pause court proceedings against Gupta’s empire while the sale of Stocksbridge is conducted, the PTI report said.
In February last year, Liberty Steel acquired Odisha-based Adhunik Metaliks and its subsidiary, Zion Steel, in an all-cash deal and followed up with the acquisition of Andhra Pradesh-based SBQ Steels in a similar transaction. Following the acquisition, the group started partial operations in Adhunik and employed around 1,500 people.
Significantly, Liberty raised funds from overseas for both the transactions after several Indian lenders declined to fund the transactions.
“Since no Indian lender has any exposure to any Liberty Steel companies, the fate of the two Indian units will finally depend on how the overall restructuring process of Liberty Steel goes," said the second person cited above, also requesting anonymity.
Earlier this month, the UK’s fraud prosecutor opened a probe into Sanjeev Gupta’s GFG Alliance over fraud and money laundering suspicions, causing a potential lender to the group to withdraw from agreements to provide new financing.
According to a Bloomberg report, the UK’s Serious Fraud Office (SFO) is investigating “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business".
The probe includes the financing arrangements with Greensill Capital UK Ltd.
The SFO has been looking at GFG since Greensill’s collapse in March and decided to open a formal probe, Bloomberg reported, citing a person familiar with the matter.
A query emailed to Liberty Steel remained unanswered until press time on Tuesday.
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