Essar on August 26 announced it has signed a Rs 19,000 crore sale pact with Arcelor Mittal Nippon Steel (AM/NS) for certain Ports and Power infrastructure assets which are primarily captive to Hazira steel plant operations.
It stated that the deal also envisages a 50-50 Joint Venture partnership, for building a 4 MTPA LNG terminal at Hazira, Gujarat, between Essar and ArcelorMittal.
AM/NS India is a joint venture between Lakshmi Mittal-led ArcelorMittal and Nippon Steel, two of the world’s leading steel manufacturing organisations.
While commenting on the deal, Rewant Ruia, Director, Essar Ports & Terminals Limited, said, “With this deal, which yields a multifold return on our investments, Essar Ports & Terminals has unlocked value for all its stakeholders and will continue to focus on building new and modern core infrastructure assets in India and overseas.”
With this agreement, Essar will complete its anticipated asset monetisation programme and complete the Rs 2,00,000 crore debt repayment plan, with the Indian banking sector being almost fully repaid. Essar’s total revenues will be around 1.2 lakh core and its AUM (Asset Under Management) will be around $8 billion (or Rs 64,000 crore), made up of a variety of assets located both in India and abroad.
It is mentioned in Essar’s statement that these assets under Energy sector include a 10 MTPA refinery in the United Kingdom (UK), 15 TCF reserves (including some producing fields) of Unconventional Hydrocarbons in India & Vietnam and a 1,200 MW Power Plant in India; Infra sector assets include a storage terminal in UK of 3 million m3 capacity and a 20 MTPA Port in India; Metals & Mining sector assets include a major iron ore mine and pellet project in USA; Technology & Services sector assets include Global EPC business and IT solutions provider with centers across 30+ countries.
Prashant Ruia, Director, Essar Capital, said, “Essar is now repositioned for growth and resurgence. After consolidating our businesses over the last 4 years, 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.”
The company has also stated that in its core industries of energy, infrastructure, metals & mining, and technology & services, it has planned large expenditures. While continuous operations will ensure operational stability, their renewed focus will be on converting existing assets to green technology and investing in clean companies that are reshaping entire industries.
The closing of the M&A deal is subject to completion of certain corporate and regulatory approvals applicable for respective assets.