Liberty eyes other acquisitions if bid for Tata Steel UK fails

11 June 2016

Liberty House Group, which wants to buy the British assets of Tata Steel (TISC.NS), has its eye on other steel plants in the United States, Africa and India if the Tata deal doesn't happen, Executive Chairman Sanjeev Gupta told Reuters.

Liberty and other companies belonging to the Gupta Family Group (GFG) are looking for acquisitions and GFG plans to list part of its assets to expose itself to the rigorous governance demanded of public companies, Gupta, who is co-owner of the group, said on Friday.

"We are discussing various alternatives but something within the group will be listed within the next 12-18 months," he said. "It’s ambitious but that’s what we’re going to try to do," he said. He did not say where the group planned to list.

GFG companies are particularly interested in turnaround assets, Gupta said.

"Whatever we have bought so far has been cheap and we’ve managed to turn them around," he said.

"Every single one of our peers is out there trying to deleverage, dumping high-quality assets into a market that doesn’t want to buy them," Chief Investment Officer Jay Hambro said.

Liberty is one of a number of companies that have put forward offers to buy Tata Steel's loss-making UK operations and save thousands of jobs in Britain, whose steel industry has been hit by cheap Chinese imports, high energy costs and a global supply glut.

"If it happens then for the short to medium term we would be focused on the UK. But if it doesn’t happen then we have a few options in the U.S., in Africa, again India where we are looking at opportunities," Gupta said, referring specifically to steel plants.

Liberty and its sister company SIMEC each have assets worth about $400 million, with no long-term debt, and the group also includes an investments arm worth a further $200 million, Gupta said.

GFG agreed late last year to buy Britain's Tungsten Bank for about 30 million pounds ($43 mln).

"It’s somewhat of a distressed asset that we will completely reinvigorate and launch as a specialist trade finance bank," said Hambro.

SIMEC, which has energy, mining and infrastructure assets, is also looking at coking coal assets in Australia, Gupta said.

SIMEC is planning a major expansion of its European trading operations with a new Geneva office and new hire Ugur Hekimoglu as head of oil, it said in a statement.

The company is building a depot in Britain to store and distribute oil products, and in principle it would be interested in upstream and downstream assets as well, such as mid-sized oil refineries in areas where the firm already has a strong presence, Gupta said.

"The UK and Europe is the first place - but it’s not the only place. We’d look at Asia, Middle East, Africa, even America," he said.

The GFG group, owned by Gupta, his father PK Gupta and family trusts, aims to raise earnings before interest, tax, depreciation and amortization to $300 million in 2020 from $140 million this year, with net assets rising to $1.75 billion from $1 billion.

Gupta did not provide a profit figure but he said the group had almost no depreciation or interest expenses.


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