Essar inks $2.4 bn deal to sell ports business to ArcelorMittal Nippon Steel
The pact will boost the steelmaker’s India business and free up the Ruias to settle debts.
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Editor's note: After a lengthy court battle, ArcelorMittal Nippon Steel India and Essar have agreed to settle their differences by signing a $2.4 billion (Rs 19,000 crore) deal that will see the Aditya Mittal-led company take over critical port and power infrastructure controlled by the Ruia family. These assets include the port in Hazira, where the ArcelorMittal Nippon Steel facility is located. The company will also take over ports in Visakhapatnam (Andhra Pradesh) and Paradip (Odisha). The power assets include a multi-fuel power plant and a gas-based power plant, both located in Hazira. Finally, there is a 100 km transmission line that connects the steel facility with the national electricity grid. In Visakhapatnam and Paradip, ArcelorMittal Nippon Steel operates iron ore pellet plants. Access to ports will substantially bring down production costs, delivering crucial margins for the steel company, since waterways are the cheapest mode to move raw materials. Logistics can otherwise make up almost 50% of a steel company’s costs. ArcelorMittal Nippon Steel, as we had written here, has ambitious plans for India, such as expanding its steelmaking capacity from the …
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