MELBOURNE (Reuters) - Liberty House says it will pump A$1.26 billion (£0.77 billion) into steel-making capacity in Australia to meet the demands of a decade-long infrastructure boom in the country, months after acquiring a steelworks which was in voluntary administration and billions of dollars in debt.
The British firm’s executive chairman, billionaire Sanjeev Gupta, visited the South Australian town of Whyalla to announce the upgrades on Friday, saying a 100-day review would result in plans to transform the plant, including fixing its power needs by harnessing waste gases and investing in pumped hydro and large-scale solar energy.
The previous owner of the steelworks, Australian steel group Arrium Ltd, collapsed in April 2016 with A$2.8 billion in debt after creditors rejected a $927 million bailout proposal by private equity group GSO Capital Partners that would have paid no more than 55 cents on the dollar on their claims.
But despite its 18-months in limbo, Gupta told Australian media on Friday he did not see why the plant should be condemned.
“I saw an asset which was misunderstood, underappreciated and I saw a discussion going on about how to transition to its close so that the impact on the town was minimised — I was shocked,” Gupta said.
He told the Australian Financial Review on Friday of short-term plans to lift the steel plant’s capacity to 1.5 million tonnes and increase output at the electric arc furnaces and rolling mills on the east coast to meet an “immense”, 10-year pipeline of new infrastructure projects in Australia including highways, bridges and airports.
In a nod to its pre-Arrium glory days, Gupta said the plant and its associated infrastructure would now operate under the name Liberty OneSteel.
Liberty House, which operates together with energy and commodities business SIMEC under the $9.4 billion Gupta Family Group (GFG) Alliance, hit the headlines last year when it offered to rescue steel plants owned by Tata Steel UK that were on the verge of shutdown.
Liberty has since bought an aluminium smelter in Scotland and a steel plant in the United States
Reporting by Joseph Hinchliffe; Editing by Jacqueline Wong