India-born British businessman Sanjeev Gupta, who made headlines in 2016 for buying Tata Steel’s UK units, has acquired the bankrupt Adhunik Metaliks and Zion Steel for £42.5 million. He is the second global steel tycoon to debut in India, one of the world’s vibrant metal markets, after L N Mittal.
The announcement comes after the National Company Law Appellate Tribunal (NCLAT) told Gupta to make a payment by February 14 if he wants to proceed with the acquisition of Adhunik and Zion. Though Gupta had put in a bid for Adhunik and Zion in 2018, the process got delayed because of litigation. The NCLAT had ordered liquidation of the two companies. But after an appeal from Gupta, the liquidation order was stayed. Adhunik and Zion had a debt of over £500 million.
“It has been a challenging journey to get us to this stage,” said Gupta, who is chairman of Liberty Steel Group. He added, “It is great to be investing in the country where my family began in the steel industry a generation ago.” Liberty, which Gupta launched 27 years ago while studying at Cambridge University, is the eighth largest steelmaker in the world outside of China with operations in 200 locations in 10 countries.
Gupta’s immediate plan is to revive Adhunik and Zion by introducing his ‘green steel’ model in their operations. The model is based on using renewable power to fire furnaces that recycle scrap and use the finished steel to make value-added products. Adhunik’s plant in the eastern Indian state of Odisha, with a coal-fired blast furnace, an electric arc furnace and a power plant, has an annual capacity of 500,000 tonnes of crude steel. Zion Steel is a rolling mill and the two units together have rolling capacity of 400,000 tonnes a year, making products for the automotive, energy and engineering sectors.
The operations, which are currently shut, will be integrated into Liberty Group, which was formed last year and aims to become carbon neutral by 2030. Liberty Steel, with annual output of 18 million tonnes, is the world’s 17th largest steel producer. The steel group has operations in 10 countries and 30,000 employees, not including the new Indian operations. GFG has merged its steel operations in preparation for a potential listing, Gupta said in October.
