'Insolvent' Liberty House put into judicial management

: Metals
25/05/22

Liberty House Group, part of the GFG Alliance, has been placed into judicial management by the High Court of Singapore, following an application by steelmaker ArcelorMittal.

ArcelorMittal filed for judicial management after Liberty's failure to pay it €240mn in arbitral awards in 2024, in relation to its purchase of the latter's Ilva-related disposals. The deal to buy those assets was known in Liberty as "Project Delta".

In response to ArcelorMittal's application, Liberty filed for a moratorium, proposing a scheme whereby it would offer a 1pc return to creditors on liabilities of $4.2bn. This money would be raised by its subsidiaries OneSteel or Liberty Primary Metals Australia, but was later reduced from $42mn to $30mn, following the South Australian government placing OneSteel into administration. Liberty said it would still be able to secure the lower funds from the sale or fundraising of its Tahmoor coking coal plant. As of 31 March 2024, Liberty House Group had just $59,088 in cash and no ability to raise funds on its own, Judge Kumar Nair said in his ruling, adding it was "indisputably insolvent".

"In essence, Mr Gupta was proposing to raise funds from entities he ultimately owned and controlled to enable the company to discharge its debts entirely by paying one cent to the dollar, while retaining (beneficial) ownership and control of the company and the group", Nair added.

Separately, accounts to 30 June 2023 for Liberty Primary Metals Australia, which would help fund the scheme, were "qualified" by the auditor, Nair said, quoting "significant doubt" on the company's ability to continue as a going concern". This was not mentioned in any affidavits regarding the scheme provided by GFG Alliance head Sanjeev Gupta, Nair said.

Liberty House Group's "lack of candour cast serious doubts on its bona fides" and ability to make any repayments, Nair added.

The judge said it would be preferable for creditors for the business to be placed into judicial management, rather than liquidated.

An old organisation chart shows Liberty House Group controls Liberty Commodities and Liberty Industries Holding, with the latter sitting above most UK entities, except the mothballed Newport rolling mill. Although it is not clear whether the corporate structure has changed since.

"This is a long-running commercial dispute related to a contested claim from 2019, which GFG continues to challenge through legal means", a GFG spokesperson said, adding it had "served an intention to appeal to have the order overturned".

By Colin Richardson

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25/06/12

Brazil BEV sales hit record high in May

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UK ETS emissions fell by 11pc on the year in 2024

25/06/12

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India’s HCL to treble copper ore output by 2031

25/06/12

India’s HCL to treble copper ore output by 2031

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Philippines axes planned ban on nickel ore exports

25/06/12

Philippines axes planned ban on nickel ore exports

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