Essar signs $2.4 billion sale pact with Arcelor Mittal Nippon Steel for infrastructure assets


In one of India’s largest post-pandemic M&A transactions, Essar on Friday announced the signing of definitive agreements with Arcelor Mittal Nippon Steel (AM/NS) for certain port and power infrastructure assets which are primarily captives of the operations of the Hazira steelworks.

The agreement also envisages a 50-50 Joint Venture partnership, for the construction of a 4 MTPA LNG terminal in Hazira, Gujarat, between Essar and ArcelorMittal.

Rewant Ruia, Director of Essar Ports & Terminals Limited, said: “With this agreement, which generates multiple return on investment, Essar Ports and Terminals has unlocked value for all its stakeholders and will continue to focus on building new modern core infrastructure assets. in India and abroad.

Prashant Ruia, Principal of Essar Capital, said: “Essar is now repositioned for growth and resurgence. After consolidating our business over the past 4 years, we have now entered the next phase of growth focused on building a sustainable energy future that will impact lives and livelihoods for a greener world. »

With this agreement, Essar will complete its planned asset monetization program and complete the $25 billion debt repayment plan ( 2,00,000 crore), with the Indian banking sector being almost fully reimbursed. Essar’s total revenue will be US$15 billion (~ 1.2 lakh core) and an AUM (Asset Under Management) of US$8 billion ( 64,000 crore) comprising various assets spread across India and overseas.

These energy assets include a 10 MTPA refinery in the United Kingdom (UK), 15 TCF reserves (including some production fields) of unconventional hydrocarbons in India and Vietnam and a 1 200 MW in India; The assets of the Infra segment include a storage terminal in the United Kingdom with a capacity of 3 million m3 and a port of 20 MTPA in India; Metals and mining assets include a major iron ore and pellet mine project in the United States; Technology and services assets include global IT and enterprise solutions provider EPC with centers in more than 30 countries.

By monetizing assets in a planned and strategic way, which have been built with previous technologies over the past few years, Essar is now ready to reinvest in new assets with the latest, more efficient and ESG-compliant technologies to last for decades, a company statement said.

Essar has planned significant investments in its key sectors of energy, infrastructure, metals and mining and technology and services. While ongoing activities will ensure operational stability, our renewed focus will be on greening existing assets and investing in clean businesses that are transforming the sector around the investment themes of decarbonization and digitalization.

The closing of the merger and acquisition transaction is subject to the receipt of certain corporate and regulatory approvals applicable to the respective assets.

Essar Ports & Terminals Limited (“Essar Ports”) is the holding company of Essar which focuses on building and operating sustainable ports and logistics businesses and is now focused on building a logistics portfolio green. Essar Ports has experience building over 180 million tonnes of port capacity. across the world, including India and the UK.

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