London-based Liberty Steel Group, which acquired Adhunik Metaliks (AML) in March this year for Rs 500 crore, is looking for more acquisitions in India. The group sees high growth in the Indian economy after the country emerges from the lockdown.
As a first step after the acquisition of AML, Liberty plans to double capacity of the company’s Odisha plant to 1 million tonne. With this, the plant — which was shut for five years — will start production from next month, thus, saving 2,200 jobs, say top Liberty officials.
Liberty Steel Group officials said AML will be the first big-ticket investment under the Indian insolvency process by Sanjeev Gupta-led Gupta Family Group (GFG) Alliance, of which Liberty Steel Group is a part of.
The group was set up by Gupta, the first-generation entrepreneur, who bought several stressed assets all over the world. In 2017, the group acquired Tata Steel UK’s specialty steel business for £100 million, which saved 1,700 local jobs. In July this year, Gupta was quoted as saying that he will be interested in joining hands with Tata Steel UK to take over latter’s Port Talbot plant. Talks are currently on.
The Liberty group had earlier tried to acquire other stressed assets like Amtek Auto, but failed to close the deal due to lack of clarity and misinformation on critical matters.
Banks had even threatened to take action against the group as it withdrew its offer after it was cleared by the lenders. The matter, however, was settled amicably.
Liberty officials said despite the coronavirus (Covid-19) pandemic, capital repairs were undertaken in Adhunik Metaliks so that the company gets back on tracks after a prolonged shut down.
Banks had earlier lent Rs 5,000 crore to AML but it was sent to bankruptcy court for debt resolution when previous owners failed to keep the business running. Liberty also acquired Zion Steels, which produces TMT Bars for Adhunik Metaliks.
Company officials said Liberty’s strategy in India is driven by four key trends — raising demand for steel and aluminium, the urgent need to decarbonise these sectors, the need for new investment in traditional manufacturing industries and the need to be globally competitive in a changing world.
“Our strategy enables us to identify opportunities and drive positive change in our industries. This means modernising industrial sites that have been left behind, establishing partnerships with employees to create self-determined change, and transforming manufacturing processes by harnessing renewable power and agile production,” said V Ashok, global CFO at GFG Alliance.
“This leads to lower costs, reduced emissions and sustainable profits to secure long-term employment in the communities we operate in,” he said.
Source: Business-Standard