ArcelorMittal won a tender on Tuesday to place a subsidiary of Liberty Steel, owned by commodities magnate Sanjeev Gupta, into administration due to debt of 140 million euros ($147.4 million). which a London court found unlikely to be paid.
ArcelorMittal, the world’s second-largest steelmaker, has sued Liberty Steel East Europe (Holdco) Ltd after an arbitration tribunal ruled in its favor over an unpaid debt owed by Liberty Steel East Europe relating to the company’s acquisition, in 2019, of certain ArcelorMittal assets.
Liberty Steel is part of the Gupta family conglomerate GFG Alliance, which refinanced its steel, aluminum and energy businesses after its backer, supply chain finance firm Greensill, filed for insolvency in March 2021.
GFG Alliance said Tuesday’s decision “has no effect on our operations or production.” ArcelorMittal did not immediately respond to a request for comment.
Liberty Steel East Europe argued there was no need to place the company into administration, a form of creditor protection that can lead to the company being sold, as it planned to restructure it.
But Judge Mark Mullen said after a brief hearing on Tuesday that Liberty Steel East Europe “is unable or likely to be able to pay its debts”.
“There is a very significant debt of more than 140 million euros which is unpaid… since February 2023,” the judge said, adding that it was “evidence of the insolvency of the flows cash”.
A GFG Alliance spokesperson said in a statement that Tuesday’s ruling concerns “a long-standing commercial dispute […] which GFG contests by legal means”.
“The dispute concerns claims arising from a sale and purchase agreement which itself is the subject of confidential arbitration proceedings,” the spokesperson added.
“This legal process takes place at the holding company level and has no effect on our business or production.
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