Court ruling paves way for sale of Gupta’s Belgian steel plants

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.

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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.

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