London-based Liberty Steel Group, which acquired Adhunik Metaliks Ltd (AML) in March this year for Rs 500 crore, is looking for more acquisitions in India taking in view the high growth expected in the Indian economy after the country emerges from the lockdown.
As a first step post acquisition of AML, Liberty plans to double the capacity of the company’s Odisha plant to one million tonnes. 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 company had earlier tried to acquire other stress assets like Amtek Auto but failed to close the deals 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.
Company officials said despite 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 Limited which is producing TMT Bars for Adhunik Metaliks.
Company officials said Liberty’s strategy in India is driven by four key trends – increasing 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 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.
The group was set up by first generation entrepreneur who bought several stressed assets all over the world. In 2017, the group acquired Tata Steel UK’s speciality steel business for 100 million pounds which saved 1700 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. The talks are currently on.