Steel Mills
ArcelorMittal, NSSMC Approved to Purchase India's Essar Steel
Written by Sandy Williams
October 26, 2018
Joint partners ArcelorMittal and Nippon Steel & Sumitomo Metal Corp. have been approved by creditors to acquire Essar Steel India Limited (ESIL) for an upfront payment of 42,000 crore rupees and investment of 8,000 crore rupees to improve operations (about $5.7 billion and $1.1 billion in U.S. dollars).
ESIL, an integrated flat steel producer, is the largest steel company in western India with an annual crude steel production of 6.5 million metric tons. ESIL also owns iron ore pellet facilities in east India with a current annual capacity of 14 million metric tons.
The partners plan to increase ESIL’s finished steel shipments to 8.5 million tons over the medium-term and to between between 12 million and 15 million tons through ongoing capital investment and the addition of new iron and steelmaking assets.
ArcelorMittal and NSSMC will finance the joint venture through a combination of one-third partnership equity and two-thirds debt. The partners currently have three joint companies in the U.S: AM/NS Calvert, I/N Tek and I/N Kote.
NSSMC called India “one of the most promising markets in the world.”
Said NSSMC in a press release, “By bringing together the strengths of both companies, NSSMC and AM will be able to turn around ESIL to be a competitive steel manufacturer and contribute to further development of the Indian steel industry and Indian economy.”
Resolution of ESIL’s corporate insolvency must be formerly accepted by India’s National Company Law Tribunal before completion of the acquisition and is expected by the end of 2018.
Sandy Williams
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