Metals tycoon Sanjeev Gupta's Liberty will acquire Rio Tinto's Scottish aluminium smelter and hydro-electric power plants. Rio Tinto said it would be selling the facilities to cut debt to help combat a downturn in commodity prices. It would be selling its 100 per cent shareholding in Alcan Aluminium UK Limited for $410 million to Liberty group. Alcan operates the smelter and hydroelectric facilities at Kinlochleven and Lochaber. With the deal the the future of 150 staff employed there and a further 400 positions in the supply chain would be saved.
The deal is being paid through a combination of equity and funds raised through securitisation. Liberty has been busy buying up distressed industrial assets in Britain as a combination of high power prices, increased costs and international competition have led to them being put up for sale. Gupta said, this transaction sets very well with our vision to develop a sustainable and competitive metals industry in the UK as a key part of our global industrial business.
At the height of the steel crisis last year, Liberty re-opened a steel plant in Newport, South Wales, and has since tone on to acquire several assets from steel giant Tata, which is assessing the future of its UK operations as well as from Caparo, the industrial group that collapsed last year. Most recently, Liberty reopened a mothballed steel plate mill in Dalzell, near Glasgow, which Tata had shut.
Liberty tried to buy all of Tata's UK steel assets before the Indian owned company did an about-turn on the sale in favour of a merger with European rival ThyssenKrupp.
