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Sanjeev Gupta’s Liberty House to enter India with acquisition of stressed assets

LiveMint logoLiveMint 24-07-2017 Shally Seth Mohile

Mumbai: Liberty House Group, the UK-based global metals and engineering firm controlled by billionaire Sanjeev Gupta, is looking to enter the Indian market and invest in the renewable energy, auto component, shipping, port, engineering and infrastructure sectors, Gupta said in a phone interview from London on Sunday.

The entry will be through the acquisition of distressed assets or direct investment.

“India has great potential. We are examining the market for all businesses. But we are cautious and in no hurry,” Gupta said.

On 20 July, the India-born steel tycoon, often referred to as “the white knight of Britain’s steel plants”, bought the UK assets of Amtek Global Technologies Pte, a subsidiary of India’s debt-ridden Amtek Auto, for an undisclosed amount.

Gupta said his firm is also one of the bidders for ABG Shipyard Ltd and the India assets of Amtek Auto.

Last week, ABG Shipyard admitted before the Ahmedabad bench of the National Company Law Tribunal (NCLT) that it had defaulted on loan repayments and agreed for bankruptcy proceedings to be initiated against it.

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).

Chandresh Ruparel, co-managing director at N.M. Rothschild and Sons (India) Pvt. Ltd, an investment banking firm, said with a dozen Indian firms going through bankruptcy, the timing for a buyout for a group like Liberty couldn’t be better.

“It’s the opportune time for whoever has the cash and management bandwidth,” said Ruparel, adding that such deals helped everyone involved.

“The acquisition of Amtek’s UK business, (now part of Liberty Aluminum Technologies Ltd) is central to our strategy of going downstream. We are keen to become a dominant player in the automotive supply chain,” Gupta said, adding the firm “became aware of the opportunity for the entire Amtek group”, and will continue to pursue this.

Liberty has made somewhat of a cause of such deals. It acquired Caparo Plc’s advance engineering business, previously owned by India-born business magnate Swaraj Paul in the UK in December 2014.

This was followed by the buyout of Caparo Merchant Bar Plc , the company’s hot rolled steel unit on 1 July. Liberty also acquired the UK assets of Tata Steel Ltd’s pipe and speciality steel business in May and July this year, respectively.

In the past 25 years, the Liberty Group has diversified from commodities to general trading to manufacturing and from the UK to Africa and Asia.

“Our objective is to diversify and not remain concentrated in one segment,” Gupta said.

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

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