Tata Steel UK has dragged the troubled Liberty Steel to the commercial court in the UK for failing to make the full payment for acquisition of its speciality steel product plant in 2017.
Indian-born British steel tycoon Sanjeev Gupta-led GFG Alliance through Liberty Steel had acquired then struggling plant for about £100 million with a staggered payment option.
It is reliably learnt that Liberty Steel has now missed payment to close the deal. Following this, Tata Steel has approached the UK Court to file proceedings against GFG Alliance group companies Liberty Speciality Steels, Liberty House Group PTE and Liberty Speciality Steel UK, said sources.
GFG Alliance spokesperson said since the matter is sub-judice the company will not be able to comment on the issue.
When contacted, a Tata Steel spokesperson said as this is now an active case, the company is not making any comments.
In 2017, Tata Steel had put the Speciality Steels plant on the block to support its other business in Europe. Liberty Steel then came in as white knight and saved over 1,700 jobs in Yorkshire, Lancashire and the West Midlands.
However, GFG Group, which was on an acquisition spree across the globe including India, ran into trouble after its prime lender Greensill Capital collapsed amid Covid pandemic and filed for insolvency.
Greensill Capita was recently valued at $9 billion, before some of its major customers were severely impacted by Covid pandemic and defaulted on their loan. This led to credit insurers and investment banks pull the plug on Greensill Capital.
Credit Suisse Group AG recently started court action in Australia seeking the liquidation of two Gupta-owned companies — Onesteel Manufacturing Pty Ltd and Tahmoor Coal Pty Ltd — as part of its global push to recover capital lent to Gupta's metals empire via the failed Greensill Capital.
GFG Alliance has expressed intention to contest the insolvency proceedings in Australia.