The government of the southern Indian state of Andhra Pradesh has commenced scouting for a fresh partner for a 3 million mt per year steel mill project, after declaring that its earlier chosen partner, Liberty Steel UK is “not ready for business”, a government official said on Thursday, April 1.
The move to search for a new partner for YSR Steel Corporation, a corporate arm of the state government, follows the collapse of Greensill Capital, the main financial backer of Liberty Steel UK, and the UK government’s refusal to financially support the steel company.
In February this year, the Andhra Pradesh government had selected Liberty Steel to partner YSR Steel Corporation Limited to construct the steel mill project, with the former estimated to contribute $1.34 billion towards the cost of the project, the official said. He said that the state government is reviewing the project after receiving information from the Indian embassy in the UK that the UK government would not be offering funding to Liberty Steel and that one of its funding firms has gone bankrupt.
According to the official, the state government has initiated Plan B to keep the greenfield project alive, including restarting negotiations with investors who had submitted expressions of interest (EoI) along with Liberty Steel earlier in order to participate in the project. This would include offering these other investors the option to match Liberty Steel’s financial and other commitments towards the project to be selected as a new partner for YSR Steel Corporation, the official said.