December 12, 2019 – The Court hearing the Bayou Steel BD Holdings cases issued an order approving the $28.0mn sale of substantially all of the Debtors' assets to Liberty BSG Holdings Inc. (the “Buyer”) [Docket No. 371]. The asset purchase agreement (“APA”) memorializing the sale is attached to the order as Exhibit 1.
Acquisition vehicle Liberty BSG Holdings Inc. is affiliated with the British mining group Liberty House Group ("Liberty House"). Liberty House was founded by its current Executive Chairman Sanjeev Gupta in 1992 and had a 2018 turnover of nearly $15.0bn. The famously discrete Gupta (listed on the APA's Exhibit A-1, "Knowledge of the Buyer") also heads the GFG (Gupta Family Group) Alliance, who are listed on the APA as recipients of any notice sent to the Buyers (albeit at a WeWork address in Manhattan).
Commenting on the acquisition, Mr. Gupta stated, "While the plant requires upgrades to be restarted competitively, we see good potential for the business. Bayou benefits from reliable access to supplies of recycled steel, competitive power prices and its own deep-water port.” Grant Quasha, GFG Alliance’s chief investment officer for North America, also noted that the Debtors' LaPlace Louisiana mill should eventually bring the Buyer's total U.S. production capacity to 3 million tons a year. The Buyer currently owns steel operations in Illinois, Ohio, New Mexico and South Carolina
The APA provides the following as to purchase price: "The purchase price (the ‘Purchase Price’) for the Acquired Assets shall be equal to (i) $28,000,000 (the ‘Base Purchase Price’), minus (ii) the amount of Taxes payable by Sellers to Buyer pursuant to Section 4.5.2, minus (iii) the Additional Cure Amounts, if any (the sum of the amounts set forth in clauses (i), (ii) and (iii) of this sentence, the ‘Cash Purchase Price’), plus (iv) the assumption of the Assumed Liabilities, plus (v) the payment of the cure amounts, as determined by the Court to be necessary to cure all defaults and to pay all actual or pecuniary losses that have resulted from such defaults under the Assumed Contracts/Leases, to the extent set forth on Schedule 1.1.3 (collectively, the “Cure Amounts”), plus (vi) the amount of the Administrative Bridge."
About the Debtors
Bayou Steel Group is an independent company that produces long carbon steel products in North America. The Debtors, headquartered in LaPlace, LA, have additional operations in Vinton, TX and Harriman, TN as well as three finished inventory depots in Tulsa, Chicago and Pittsburgh. Bayou Steel Group manufactures a broad range of merchant bar shapes, including equal and unequal leg angles, flats, rounds, squares and channels, as well as standard and wide-flange beams. The company also specializes in rebar production for the commercial and industrial construction industry and grinding balls for the mining industry.
The Debtors describe themselves as follows: “Bayou Steel Group was formed in 2016, but our history goes a long way back. Operations in our LaPlace headquarters began in 1979, right here on the Mississippi River, with the goal to transport raw materials and semi-finished and finished goods. We now operate a modern melt shop, in-line rolling mill, scrap-processing facility and shipping and receiving dock. In 1995, we added our Harriman location, an extension of LaPlace with rolling and distribution operations. Through the years, our locations have continued to produce high-quality steel products. Strong, nimble, proud."
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