ArcelorMittal Submits Offer For Debt-Laden Essar Steel

Galtero Lara
Febrero 15, 2018

ArcelorMittal, the world's biggest producer of the alloy, is planning a joint offer with Nippon Steel and Sumitomo Metal Corp.by Monday's deadline, according to the people. The company last week transferred its 29.1% stake in Uttam Galva Steels Ltd.to other founders, a move that analysts saw as a sign of the European giant's plan to bid for Essar Steel. Besides ArcelorMittal, Numetal Mauritius has also submitted a bid for the bankrupt Essar Steel, a report in Mint said. "Numetal bid complied with all the bidding guidelines and having Rewant Ruia as minority partner in the consortium does not make it ineligible", said another source. The company was owned by billionaire brothers Shashi and Ravi Ruia before being brought under the insolvency resolution process in August.

Mumbai: ArcelorMittal is competing with a consortium led by Russia's VTB Group as bids come in for Essar Steel India Ltd, the largest distressed steelmaker being sold under the country's insolvency process, people with knowledge of the matter said. "It highlights the extensive experience and track record of the group in the successful acquisition and integration of under-performing assets, which AMIPL believes would be of considerable value to Essar". It will also be hard for any new player to operate the Essar Steel plant at Hazira without access to the pipeline.

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In a note seen by Kallanish group chairman and chief executive Lakshmi Mittal observes: "Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian steel market". The offer submitted today by AMIPL includes a detailed investment plan to address operational issues in Essars existing asset base. "With our industry expertise and renowned operating prowess, we believe we are uniquely equipped to implement a successful turnaround which would be beneficial to Essar's stakeholders". We believe our technical experience and management know-how, gained from many successful acquisitions and integrations, will ensure success for the various steel and pelletizing operations at Essar.”. Essar's 10 million tonne steel plant in Hazira, Gujarat-India's largest single-location flat steel plant-will fit neatly into the company's plan to create a sizable footprint in the Rs 3.15 lakh crore Indian steel market. The current achievable crude steel production level is 6.1 million tonnes per annum due to a bottleneck in the steelmaking and casting process.

Led by SBI, lenders in June this year had chose to begin insolvency proceedings against Bhushan Steel, Essar Steel and Electrosteel Steels by referring them to the National Company Law Tribunal (NCLT) for recovery under IBC.

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