Second time lucky: Liberty House acquires Adhunik Metaliks in cash deal1 min read . Updated: 19 Feb 2020, 12:24 AM IST
- GFG Alliance- owned Liberty House had failed to complete the acquisition of Adhunik in its first attempt
- Adhunik and Zion had total outstanding debt of more than ₹5,000 crore
MUMBAI : In an all-cash deal, Sanjeev Gupta-led Gupta Family Group (GFG) Alliance, which owns Liberty House, has acquired bankrupt Adhunik Metaliks and Zion Steel for ₹425 crore ($60 million) under the Insolvency and Bankruptcy Code.
The transaction marks GFG Alliance’s entry into India. In a press release, the GFG Alliance said it would introduce its greensteel model to revive the steel plants—combining steel recycling with low carbon and renewable power sources.
Liberty House failed to complete Adhunik’s acquisition in its first attempt. It was given a second chance by the National Company Law Appellate Tribunal, India’s top bankruptcy court, to take over the bankrupt steel mill. Adhunik and Zion had a total outstanding debt of over ₹5,000 crore.
Adhunik is an integrated steel plant located in Chadrihariharpur near Rourkela in Odisha. It has blast furnace and electric arc furnace steel-making capability with an annual capacity of 0.5 million tonnes, besides a 34MW captive power plant.
Adhunik, along with Zion Steel, its associated steel rolling facility, has a combined rolling capacity of 400,000 tonnes per annum. It caters to 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.
Last October, GFG Alliance announced the consolidation of its steel businesses into a global entity, Liberty Steel Group, the eighth-largest steel producer in the world outside China, with operations across 10 countries, the group said.
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."