By Promit Mukherjee and Krishna N. Das
MUMBAI (Reuters) – Sanjeev Gupta, the boss of metals trader Liberty House Group who wants to buy Tata Steel Ltd’s loss-making British operations, says he has the financial resources to match his ambitions.
Hitting back at critics who have questioned his capacity to take on a business dragged down by heavy debt and weak sales, the 44-year-old Cambridge graduate said he was serious about making an offer and had the backing of a group with $ 7 billion of revenues.
“If you look at our financials, we are probably the least leveraged company in our sector,” Gupta told Reuters in a phone interview on Thursday.
“We like to punch above our weight, we like to take on challenges, but we know how to stay in business so we never over-stretch ourselves.”
Asked how profitable Liberty House’s businesses were, a spokesman for the company said it could not provide details at short notice.
Tata, the biggest steel producer in Britain, has been forced to try to sell its British businesses due to high costs, weak demand and a flood of cheap supplies from top producer China. The formal sale process for the assets, which the Indian company bought in 2007, is expected to start by Monday.
Liberty’s financial advisers will start due diligence on the assets within a week from that date, said Indian-born Gupta, who founded Liberty House in 1992 and is known among friends and former colleagues as a risk-taker with a strong network among British and U.S. financiers.
TURNAROUND
Tata, which entered the European steel market with a $ 12 billion acquisition of Anglo-Dutch Corus in 2007, will only produce steel in Europe in the Netherlands once it sells its UK business with production capacity of 7 million tonnes per year.
The British business employs about 15,000 people, and Gupta plans to retain them if a deal goes through. But he wants the government to ensure “competitive power prices” so that he can change the raw material for the steel plants to locally available scrap from imported iron ore.
The British government, under fire for the way it has responded to the crisis, opened talks with potential buyers for Tata Steel’s UK operations, including Gupta’s Liberty House, earlier this week.
“It’s a loss-making business and a loss-making business is not worth a lot in itself to buy,” said Gupta.
“It’s more of a question of what are the resources required in turning it around.”
He declined to estimate the money needed for a revival of the Tata plants.
Born in a family of businessmen in the western city of Ludhiana, he has grown his Liberty group into a multi-national player with operations run out of London, Dubai, Singapore and Hong Kong with assets in Asia, Africa and Britain.
Gupta’s Tata bid is part of a plan to turn his company into to a manufacturing conglomerate with interests in steel, power generation, renewables energy and financial services. The company last year also acquired a UK-based bank as a push towards financial services.
“We’ve a company which is doing $ 7 billion of topline, assets worth a billion dollars, no long term debt, only short term working capital, so we too have resources,” Gupta said.
“I don’t know if anybody will question the seriousness – I am obviously putting myself all out to do this.”
(Additional reporting by Freya Berry and Clara Denina in LONDON; Editing by Himani Sarkar and Keith Weir)
