ArcelorMittal Nippon Steel To Buy Port, Power Assets From Essar For $2.4 Billion

ArcelorMittal Nippon Steel India has agreed to acquire a portfolio of infrastructure assets from Essar Group for a net value of $2.4 billion (Rs 19,000 crore).

ArcelorMittal Nippon Steel signed a definitive agreement for acquiring port, power and other logistics and infrastructure assets from Essar Group, according to its statement. The transaction is expected to be funded only by AM/NS India.

The assets covered are either captive—including port assets in Gujarat, Andhra Pradesh and Odisha, and power plants at Hazira and transmission power line—or allied to AM/NS India’s steelmaking operations.

The acquisition will strengthen the strategic integration of its manufacturing and logistics chain, the company said.

The deal also envisages a 50-50 joint venture partnership for building a 4 million tonnes per annum liquified natural gas terminal at Hazira, Gujarat, between Essar and ArcelorMittal, Essar Group said in a statement.

“We have now entered the next growth phase focused on helping build a sustainable energy future that will impact lives and livelihoods for a greener world,” Prashant Ruia, director, Essar Capital said in the statement.

The transaction is the last of Essar Group’s asset monetisation plan and will aid in repaying $25 billion (about Rs 2 lakh crore) worth debt to Indian banks.

According to a person in the know, most of the funds received from ArcelorMittal Nippon Steel India will be used to repay banks, while some will be retained as growth capital.

After the conclusion of the sale, Essar Group will be left with a clutch of assets, across energy, infrastructure, metals and mining and technology and services.

Energy

  • 10 MTPA refinery in the United Kingdom.

  • 15 trillion cubic feet of unconvention hydrocarbons in India and Vietnam.

  • 1,200 megawatt power plant in Salaya Gujarat.

Infrastructure

Metals & Mining

Technology Services

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