ArcelorMittal won a bid on Tuesday to put a subsidiary of Liberty Steel, owned by commodities tycoon Sanjeev Gupta, into administration. The decision came after the court declared that Liberty Steel owed ArcelorMittal a debt of €140 million (approximately $147.4 million) which a London court found was unlikely to be paid.
ArcelorMittal sued Liberty Steel East Europe (Holdco) Ltd, and an arbitration tribunal ruled in favor of them regarding the unpaid debt owed by Liberty Steel East Europe, stemming from the company’s acquisition in 2019 of certain assets by ArcelorMittal.
Liberty Steel, a part of the GFG Alliance, has been financing hits businesses in steel, aluminium, and energy after its backer, supply chain finance firm Greensill, filed for insolvency in March 2021.
Reuters reported that GFG Alliance said that Tuesday’s ruling does not affect any of their operations or production.
Liberty Steel East Europe argued it was unnecessary to place the company into administration, a form of creditor protection that can lead to a sale of the business, as it was planning to restructure the business.
But Judge Mark Mullen said 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,” he added.
A spokesperson for GFG Alliance stated that Tuesday’s ruling refers to a long-standing commercial dispute, which the group is challenging through legal channels.