THE UK-based metals tycoon Sanjeev Gupta’s GFG Alliance has acquired a bankrupt steel plant in India for $60 million (£46m).
The latest transaction marks the Alliance’s entry into India – one of the world’s fastest-growing steel markets.
“GFG Alliance today completed the strategic acquisition of Adhunik Metaliks Ltd (Adhunik) and Zion Steel Ltd (Zion) in a Rs 4.25 billion ($60m) cash deal,” the company said in a statement.
GFG Alliance will introduce its greensteel model to revive the steel plants combining steel recycling with low carbon and renewable power sources to create a more sustainable, competitive operation serving local markets.
Gupta, executive chairman of GFG Alliance, said: “Today, marks an important milestone in our global steel strategy with the purchase of Adhunik Metaliks and our entry into India – one of the fastest growing and most vibrant steel markets in the world.
“We see huge potential in this business through the introduction of our GREENSTEEL model to create a competitive, sustainable operation to serve the local market.
“It has been a challenging journey to get us to this stage, but we now look forward to starting work in partnership with all stakeholders to revive these plants and bring employment back. On a personal note, it is great to be investing in the country where my family began in the steel industry a generation ago.”
Adhunik is an integrated steel plant located at Chadrihariharpur near Rourkela in Odisha state of the south Asian country.
The plant has both blast furnace and electric arc furnace steel making capability with 0.5 million tonnes per annum capacity, and a 34MW captive power plant.
Adhunik, along with Zion Steel, its associated steel rolling facility, has a combined rolling capacity of 400,000 tonnes per annum.
The sites manufacture products for the automotive, energy, engineering and oil and gas sectors.
Adhunik went into liquidation due to sustained losses. It recorded a pretax loss of Rs 9bn or $126.19m for the year-ended March 2018, according to the company.
The immediate focus of Gupta will be on reviving and restoring the facilities and operations, and once stabilised, the business will begin its integration into the Liberty Steel Group, according to the company.
Last year, GFG Alliance announced the consolidation of its steel businesses into one global entity – the Liberty Steel Group – the eighth largest steel producer in the world outside China, with operations in 200 locations in 10 countries.
Liberty Steel Group has a target to become carbon neutral by 2030 (CN30), according to the steel giant.
With annual output of 18 million tonnes, Gupta’s business is the world’s 17th largest steel producer, based on World Steel Association figures for 2018.
The steel group has operations in 10 countries and 30,000 employees, not including the latest Indian operations.