London - The wealthy Indian Gupta family, which owns Liberty House Group and Simec, is looking at plans to float a minority stake in its international steel-to-industrial empire that could value the business at $1bn.
Sanjeev Gupta, chairman of Liberty House which has been investing heavily in the UK's steel industry over the past few months, told The Independent: “We are considering plans to bring the two businesses - Liberty and Simec - together, and either list the merged group, or various parts of the five different parts. Plans are at an early stage and we haven't yet spoken to bankers.”
Gupta said the main reason his family was considering a listing was to introduce discipline and governance to the companies, which were likely to be renamed and branded the Gupta group. “We have reached a size where good governance and transparency is important,” he added.
“A listing will also help us put proper valuations on the business. At the last valuation, we had net assets of $1bn on the books but many of these assets were bought at distressed prices. They do not reflect the potential of the businesses that are capital intensive such as steel plants and power plants and which are now coming into production.”
In another move yesterday, Gupta announced that Liberty and Simec are investing a “significant” figure for a big stake in Tidal Lagoon Power, the power group which is building the new Swansea Bay Tidal Lagoon.
Tidal Lagoon Power has plans to develop a fleet of six tidal lagoons which could meet up to 8 percent of the UK's electricity demand. With a design life of 120 years and a annual power of over 500 GWh, the plant will produce enough power to meet the demand for 90 percent of homes in the Swansea Bay area.
Gupta added: “This is just our first investment in tidal power. Over time we will be investing an eight-figure sum in the various projects that Tidal Lagoon is working on in Cardiff, Newport and in India. Tidal Power is a 'no-brainer' - it's an energy source that lasts forever.”
The investment is part of a wider strategy by the Gupta family, through Simec, to create a multibillion-pound renewable energy capacity worldwide and innovative technologies to provide low-cost power for energy-intensive industries like steel.
Over the past year Liberty House, and Simec have bought extensive interests in power generation, steel production and engineering capacity across the UK, including the 393MW Uskmouth Power Station at Newport.
Last autumn Gupta bought several of the West Midlands engineering businesses owned by Caparo, which had collapsed into administration, saving 1 000 jobs, and is in talks to buy two Scottish steel plants owned by Tata Steel. It also re-opened the Newport steel rolling mill last year, saving another 150 jobs. Gupta said: “If we can successfully integrate these businesses, then I believe we can make UK steel competitive again.”