Liberty House Group Aims to Enter Indian Market

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Sanjeev Gupta has been sometimes called a knight in shining armor, saving the workforce of distressed steel mills across Europe and Australia.

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Now, Liberty House Group — the Gupta-controlled metals and engineering empire — plans to enter the Indian market, and is looking at investing in the renewable energy, auto component, shipping,  engineering and infrastructure sectors.

If it happens, in a sense, life would have come a full circle for the Punjab born, U.K.-based Gupta.

In an interview with the Indian newspaper Live Mint, Gupta said the entry would probably be through the acquisition of distressed assets or direct investment.

Gupta hurried to add they were in no hurry to enter this market segment, though.

In mid-July, the steel tycoon bought the U.K. assets of Amtek Global Technologies Pte, a subsidiary of India’s debt-ridden Amtek Auto, for an undisclosed amount. It would save 550 jobs. The Liberty Group is also said to be actively looking at bidding for the ABG Shipyard Ltd and the India assets of Amtek Auto. Amtek and ABG Shipyard are two of the 12 large defaulters identified by the Reserve Bank of India for launch of early bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC).

These two acquisitions could be the stepping stone for Liberty House’s entry into India, though only time will tell.

“Give me your distressed and I shall retain their jobs” seems be the motto of Liberty House, though some experts and sector observers have started questioning the viability of its business plan.

After all, where other majors had failed, what magic formula does Liberty House have to turn around the same, loss-making businesses?

Looking to Buy

The British business is reported to be profitable, though, claim local media reports.

In fiscal year 2017, the Liberty House had a turnover of $6 billion and an EBITDA (earnings before interest, taxes, depreciation and amortization) of $100 million.

In early July, Tata Steel Ltd, India’s biggest steelmaker by overall capacity, announced its U.K. unit signed an agreement with Liberty House to sell its Hartlepool Submerged Arc Weld pipe mills in Britain for an undisclosed amount. The agreement covered the sale of 42- and 84-inch pipe mills, which manufacture pipelines for gas and oil projects. The facilities employ about 140 people. Tata Steel, which entered Europe through the $13 billion purchase of Corus in 2007, has been selling off its U.K. assets piecemeal after incurring heavy losses.

Recently, the Gupta family’s GFG Alliance announced the purchase of South Australian steelmaker and iron ore miner Arrium.

Late last year, Liberty made one of its biggest acquisitions when it paid £330 million (about $560 million) for Rio Tinto’s Lochaber aluminium business in Scotland.

‘Crazy and Completely Nuts’

Liberty’s buying trend started in 2013, when it bought its first British steel mill, which was otherwise headed for closure, in south Wales.

In an interview with The Australian earlier this year, Gupta acknowledged that he had often been told he was “crazy and completely nuts” for keeping those workers on the payroll until the mill was ready to reopen.

According to the Liberty House website, Gupta founded the company in 1992 as a 20-year-old undergraduate. The company now has bases in 30 countries, and has graduated from a force of about 500 to nearly 4,500 workers.

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Clearly, at a time when the world steel market remains depressed (save in a few countries), Liberty House has a thing or two up its sleeve — which for now, remain a secret.

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