India’s largest steelmaker, JSW Steel, is considering an offer to buy Liberty Steel in the UK as well as plants in other countries, two people familiar with the matter told Reuters as potential buyers orbit the global commodities empire of Sanjeev Gupta.
JSW’s interest in works such as Gupta’s Adhunik Steel Mill in East India could add another chapter to the UK steel industry, which has been privatized and sold to overseas buyers, given its primacy in step with the country’s productive power slipped.
In a statement on Saturday, JSW Steel said its focus has remained in India for the time being and it has no intention of acquiring assets from overseas.
A sale would destroy Gupta’s extensive corporate network, which includes hundreds of privately held companies whose interests include steel, aluminum, mining, financial services and real estate, and which have been built up over years of acquisitions.
Gupta has been looking to refinance after its funding source, UK supply chain finance firm Greensill, filed for bankruptcy in March. The UK’s Serious Fraud Office announced earlier this month that it is investigating Gupta’s affairs, including its ties to Greensill.
Although JSW Steel, part of the JSW Group Metall-Zement controlled by billionaire Sajjan Jindal, was interested in a tender, according to one of the sources there were obstacles to doing business, including coping with the aftermath of Brexit and the Indian coronavirus crisis.
And no final decision had been made as to whether to bid on what the source called a “surprise package”.
“The due diligence has not yet started. After Brexit, it will not be easy to operate these assets,” he said.
A spokesperson for GFG said it “continues to serve customers around the world and is making progress in refinancing its operations that benefit from operational improvements and very strong markets for steel, aluminum and iron ore.”
Gupta was hailed as the savior of steel in Britain buying distressed assets in economically deprived areas. His group has 35,000 workers, including 5,000 in the UK, and annual sales of $ 20 billion.
UK ‘MONITORING DEVELOPMENTS’
Any change in ownership of Liberty Steel, which employs around 3,000 people in the UK, will be politically sensitive.
Darren Jones, chairman of the UK Parliament’s business, energy and industrial strategy committee, said he expects ministers to approve any buyer.
“Steel production can also be seen as an important part of our economic resilience and national security,” he said.
The government said it was “closely monitoring developments around Liberty Steel and continuing to work closely with the company, the broader UK steel industry and unions”.
Private equity investor Endless and the Chinese Jingye Group, which owns British Steel, were also interested in Gupta’s UK deal, according to people familiar with the matter.
Separately, raw materials trader Trafigura has expressed interest in investing in GFG’s aluminum smelter in Dunkirk, France, which is Europe’s largest, a source said.
JSW and Endless did not respond to requests for comment and Jingye’s British Steel declined to comment. Trafigura, which provided GFG’s Liberty House with a loan to finance the 2018 purchase of Dunkirk, declined to comment.
Gupta bought the smelter from Rio Tinto for $ 500 million.
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