Sanjeev Gupta faces losing control of his steel plants in Belgium after the
approval of a judicial restructuring of his operations in the country, paving
the way for their eventual sale.
A court in the city of Liege last
week upheld a request by workers at Gupta’s Liberty Steel subsidiary to start
the restructuring and appointed a legal representative to oversee the sale of
the two plants at Flémalle and Tilleur.
Under the process, which is designed
to protect the business from creditors and will initially run until the end of
next April, the plants will be managed by a second court appointee, the court
confirmed, adding that a buyer would be sought for all or part of the
operations.
A sale would be a setback to Gupta,
who has been battling to hold together his global metals empire GFG Alliance
since the collapse in March 2021 of its main lender Greensill Capital amid
allegations of fraud.
The UK’s Serious Fraud Office and
French police are investigating GFG Alliance companies over suspected fraud and
money laundering. GFG has consistently denied any wrongdoing.
The two Belgian steel plants, which
together employ about 650 people, operate under GFG’s steel arm, Liberty Steel
Group. GFG acquired the sites and a facility in Dudelange, Luxembourg, from
ArcelorMittal in 2018.
Gupta in May successfully appealed
against a decision that called for the Belgian business to be liquidated after
a judge rejected a restructuring plan.
Since then, however, soaring energy
prices in Europe in the wake of the war in Ukraine, coupled with falling
customer demand, have severely affected operations at the two plants, which
have been idled for several weeks.
Liberty Steel Group last month
described the request to open restructuring proceedings as “counter to the
significant efforts” made by the company to identify a sustainable future for
the businesses and warned it “may consider appropriate legal action” once
the court had made its decision.
On Friday, the company confirmed that
“Liberty Steel Group, the management team of Liberty Liège and its unions
jointly requested the Liège Enterprise Court’s opening of a judicial reorganisation . . . for its
Liège plants, which has now been granted”.
“The company’s management team, its
unions and the court-appointed administrators will now work collaboratively
with other stakeholders to identify and realise strategic options for the business,
including its sale,” the company added.
Liberty Steel last month reached an outline agreement with
some of its creditors, pushing back insolvency proceedings that had been due to
begin in London. A judge in London postponed a winding-up hearing until next
year to give both sides time to reach a deal.
