Britain-based GFG Alliance, parent of steelmaker Liberty House, completed the acquisition of Adhunik Metaliks and Zion Steel in India for Rs4.25bn ($59.38mn) in a cash deal.
Sanjeev Gupta-led GFG Alliance plans to revive Adhunik’s steel plants through scrap-based steel manufacturing with low carbon and renewable power resources for the local markets. The acquisition marks Liberty’s entry into the Indian steel market.
Adhunik’s insolvency resolution was initiated in August 2017 after it suffered losses for consecutive quarters and owed Rs5,000 crore to debtors. Adhunik Metals had posted a net loss of Rs9bn for the fiscal year ending March 2018.
India’s National Company Law Appellate Tribunal (NCLAT) had asked Liberty House to deposit a total of Rs3,700mn ($51.92mn) as full and final settlement towards all financial creditors by Feb 14, 2020, for the assets of Adhunik Metaliks and Zion Steel, as reported by Davis Index.
Adhunik’s Odisha plant has a steel production capacity of 500,000mt/yr. It is equipped with a coal-fired blast furnace, an electric arc furnace and a power plant. Zion Steel and Adhunik have a total rolling capacity of 400,000mt/yr and concentrate on making products for the automotive, energy and engineering sectors.
The operations of the Indian company will be integrated with GFC’s Liberty Steel. The company aims to become carbon neutral by 2030.
($1 = 71.56)