Liberty Steel buys former British Steel's French rail business
LONDON (Reuters) - Privately-held Liberty Steel said on Friday it had acquired the Hayange business in France that makes railway tracks which was previously owned by British Steel.
The French government blocked the purchase of Hayange by China's Jingye Group, which completed the buyout of the UK and Dutch assets of British Steel in March.
It regarded Hayange in eastern France as a strategic asset since it is a supplier to railway company SNCF.
British-based Liberty, owned by the GFG Alliance headed by British-based tycoon Sanjeev Gupta, said in a statement it also bought the Ascoval steel works in northern France. It did not disclose the purchase prices.
Ascoval was owned by an investment vehicle of Greybull Capital. It uses electric arc furnace technology to process scrap steel and has a capacity of 600,000 tonnes annually. It will supply raw material to Hayange, which produces over 300,000 tonnes of rail track a year.
Liberty said it will invest 65 million euros (59 million pounds) in the two operations, which will produce low-carbon steel as part of the group's pledge to become carbon neutral by 2030.
"We intend to develop Ascoval as a GREENSTEEL hub and to drive Hayange into new markets through strong engagement with European rail operators seeking to make their networks carbon neutral," Gupta said in the statement.
Gupta's GFG Alliance, which also has operations in aluminium and infrastructure, said in June it would cut costs and shed jobs following a sharp slide in demand that could last up to 18 months due to the COVID-19 pandemic.
Liberty Steel has a rolling capacity of over 18 million tonnes with operations in 10 countries and 30,000 employees.
British Steel was placed into compulsory liquidation in May last year after Greybull Capital, which bought it for a token one pound from Tata Steel <TISC.NS> in 2016, failed to secure funding to continue its operations.
(Reporting by Eric Onstad; editing by Emelia Sithole-Matarise)
