OUR BUSINESS WEB DESK
Japan’s top steel manufacturer Nippon Steel & Sumitomo Metal, NSSMC on Friday announced that it has won a joint bid to acquire bankrupt Indian steelmaker Essar Steel India Limited, ESIL.
The company said that the creditors for India’s 4th biggest steelmaker declared the Japanese company to be one of two successful bidders. The other is the world’s leading steelmaker, ArcelorMittal.
The 2 firms will acquire Essar Steel for some 5.8 billion dollars. The manufacturer is presently under financial rehabilitation.
Nippon Steel & Sumitomo Metal is expected to shoulder about half the purchase price, if the acquisition is officially approved through tribunal examinations.
The Japanese maker says the move would be one of its largest-ever acquisitions of a foreign company.
It describes India as one of the world’s most promising steel markets.
Essar Steel manufactures steel products at its blast furnace complex in western India and markets them throughout the country. Nippon Steel & Sumitomo Metal expects the acquisition will help grow its Indian business.
In a statement Nippon Steel & Sumitomo Metal said India is one of the most promising markets in the world with significant growth potential in the medium- and long-term and where domestically produced steel products have a superior position.
In order to further expand and strengthen our global business, NSSMC has been seeking opportunities to engage in integrated steel production in India to steadily capture the growing demand for steel products, which is expected to increase along with the development of infrastructure.
ESIL is one of the major steel companies in India, which has a fully integrated steelworks located in its west coast region. ESIL manufactures and sells steel sheets, plates, and pipes through its extensive domestic sales channels. It also owns pellet plants in east part of India.
NSSMC and AM have established a close cooperative relationship for many years through their global strategic alliance and have been jointly managing three companies in the United States (AM/NS Calvert, I/N Tek, and I/N Kote). NSSMC believes that, 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 Indian steel industry and Indian economy.
ESIL’s outline (Source: ESIL Annual Report 2016-2017)
1) Corporate name: Essar Steel India Limited
2) Establishment: 1976
3) Capital: 31.5 billion INR (51.7 billion yen at 1.64 yen/INR)
4) CEO: Jatinder Mehra
5) Main production base: Hazira Steelworks (Gujarat State in the west coast region of India)
6) Production capacity: 10 million tons (nominal capacity) (Integrated steel mill)
7) Product types: hot-rolled, cold-rolled and galvanized steel products, steel plates, steel
pipes
8) Number of employees: 3,988 (as of the end of March 2017)
9) Revenue (consolidated): 219.6 billion INR (FY 2016; 360.1 billion yen)