NEW DELHI: Essar Group on Friday announced one of the biggest post-pandemic merger & acquisition (M&A) deals for USD 2.4 billion (Rs 19,000 crore) to sell its ports business to steel magnate LN Mittal-led Arcelor Mittal Nippon Steel Ltd.
In a statement, Essar said it has signed definitive agreements with ArcelorMittal Nippon Steel for certain ports and power infrastructure assets which are primarily captive to Hazira (Gujarat) steel plant operations.
With this deal, Essar said it will conclude its planned asset monetisation programme and complete the debt repayment plan of USD 25 billion (`2,00,000 crore) with the Indian banking sector being almost fully repaid.
The deal also envisages a 50-50 Joint Venture partnership, for building a 4 MTPA LNG terminal at Hazira, Gujarat, between Essar and ArcelorMittal. This will intensify the competition of the JV with India’s largest port operator- Adani Ports and SEZ.
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.”
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.”
Essar’s aggregate revenues will stand at USD 15 billion (Rs 1.2 lakh core) and an AUM (Asset Under Management) of USD 8 billion (Rs 64,000 crore) comprising various assets spread across India and overseas.
These assets under the energy sector include a 10 MTPA refinery in the 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 the UK of 3 million m3 capacity and a 20 MTPA Port in India.