ArcelorMittal is among the bidders for French steel mills in Gupta

ArcelorMittal, one of the world’s largest steel producers, is among a number of companies preparing to pounce on the French steel mills of embattled metal magnate Sanjeev Gupta.

Sources familiar with the situation confirmed that German steel producer Sarchtal and Italy’s Beltram Group are also vying to buy the French Gupta factories Esscoval and Hyang.

ArcelorMittal declined to comment. Sarchtal and Beltram could not be reached for comment.

Financial Times revealed earlier this month Gupta’s Liberty Steel, the steel division of its GFG Alliance mineral conglomerate, has put the plants in northeastern France up for sale after failing to refinance them.

Liberty Steel only bought Hayange last August after its former operator, British Steel, collapsed into bankruptcy.

Ascoval was previously controlled by Greybull Capital, the private investment firm that owned the UK steelmaker, and was bought by Liberty at the same time.

GFG has been striving to find new sources of funding since its major lender Greensill Capital collapsed into management in March.

The group was also bombed fraud suspicionswhich is being investigated by the Serious Fraud Office.

The government is closely monitoring the sale of French manufacturers.

Hayange, near the German border, is a strategic national asset as it builds railways for the French Railroad and the Paris Metro. Ascoval operates an electric arc furnace for scrap recycling.

In March, the French government provided a loan of 20 million euros for the two stations. It said it was ready to support workers and sites affected by the disruptions at GFG, but it would not save shareholders. The loans were made on the condition that the company was able to raise new financing.

The official sale process began at the end of April, according to a person familiar with the situation. Rothschild offers advice on selling.

GFG said it remains “confident” of securing new funding, given the strength of the steel market, even though the two sites have faced a “significant reduction in working capital support” since the Grencelle collapse.

“At the same time, we are taking prudent steps to explore selling options for these companies and will invite interested parties to submit bids,” the company added.

GFG also sells three specialty steel plants in the UK, including its operations in Stocksbridge in Yorkshire, as it seeks to avoid a broader meltdown.

Sources familiar with the situation said that a number of potential interested parties have come forward in recent days.

GFG has been trying to refinance its British operations, but talks with White Oak Global Advisors, a US-based private financial group, faltered after news of the SFO investigation spread. GFG said it would cooperate with the investigation.

Jinji Group, the Chinese owner of British Steel, told government officials that it is Willing to step in to take over parts of Liberty Steel. However, the company is understood to be particularly interested in Liberty’s steel mills in Rotherham, which GFG said are not for sale.

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