ArcelorMittal wins UK bid to put Liberty Steel subsidiary into administration over unpaid debt
LONDON, Nov 26 (Reuters) -ArcelorMittal MT.LU won a bid on Tuesday to put a subsidiary of Liberty Steel, owned by commodities tycoon Sanjeev Gupta, into administration due to a 140 million euro ($147.4 million) debt which a London court found was unlikely to be paid.
ArcelorMittal, the world's second-largest steelmaker, sued Liberty Steel East Europe (Holdco) Ltd after an arbitration tribunal ruled in its favour over unpaid debt owed by Liberty Steel East Europe relating to the company's acquisition in 2019 of certain assets from ArcelorMittal.
Liberty Steel is part of Gupta's family conglomerate, GFG Alliance, which has been refinancing its businesses in steel, aluminium and energy after its backer, supply chain finance firm Greensill, filed for insolvency in March 2021.
GFG Alliance said Tuesday's ruling "has no effect on any of our operations or production". ArcelorMittal did not immediately respond to a request for comment.
Liberty Steel East Europe argued it was unnecessary to place the company into administration, a form of creditor protection which can lead to a sale of the business, as it was planning to restructure the business.
But Judge Mark Mullen said after a brief hearing on Tuesday that Liberty Steel East Europe "is unable to pay its debts or be likely to become so".
"There is a very substantial debt in excess of 140 million euros which has been outstanding ... since February 2023," the judge said, adding that this was "evidence of cash flow insolvency".
A GFG Alliance spokesperson said in a statement that Tuesday's decision related to "a long-running commercial dispute ... which GFG is challenging through legal means".
"The dispute refers to claims arising from a sales and purchase agreement which is itself being litigated in confidential arbitration," the spokesperson added.
"This legal process is at a holding company level and has no effect on any of our operations or production."
Reporting by Sam Tobin; Editing by Susan Fenton
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