Andhra Pradesh Chief Minister YS Jaganmohan Reddy’s dream project of setting up a steel plant in Kadapa is heading for a crisis even before its launch.Jagan laid the foundation stone for the steel plant in Jammalamadugu mandal on December 23, 2019 amid much fanfare.
He had allotted 3,295 acres for the plant. Jagan has decided to set up AP High-Grade Steels Ltd. (steel plant) at Sunnapurallapalle and Peddananduluru villages in Kadapa district, with an aim to produce three million metric tonnes per year, including 84.7 MW of electricity generation in the first phase.
He has decided to set up the steel plant as a joint venture and had selected Liberty Steel India as their partners. In the first phase the project is expected to cost Rs 10,082 crore and another Rs 6,000 crore will be spent in the second phase. The production capacity is expected to be doubled in the second phase of the project.
It has now come to light that the JV partner Liberty Steel India is in a deep financial crisis.
This is because Greensill Capital, the main creditor of GFG Alliance has filed insolvency protection in London.
GFG Alliance is the parent company of Liberty Steel India.
GFG Alliance owes Rs 30,000 crore loans to Greensill Capital.
In its insolveny protection, Greensill capital stated that GFG Alliance is in deep financial crisis due to which it defaulted on loan repayment.
Now questions are being raised how Liberty Steel India will invest Rs 16,000 crore in Kadapa Steel Plant when it’s parent company GFG Alliance is in deep financial crisis.
