In a major post-pandemic M&A deal in India, Essar Group on Friday announced a $2.4-billion (nearly Rs 19,000 crore) deal to sell its ports business to ArcelorMittal Nippon Steel (AMNS). In this regard, the company has also signed definitive agreements with AMNS for certain ports and power infrastructure assets, which are primarily captive to Hazira steel plant operations.
“The deal also envisages a 50-50 joint venture partnership, for building a four million tonnes per annum (MTPA) LNG terminal at Hazira, Gujarat, between Essar and ArcelorMittal,” Essar said in a statement.
The deal is subject to the completion of certain corporate and regulatory approvals applicable for respective assets.
It added that with this deal, Essar will conclude its planned asset monetisation programme and complete the debt repayment plan of $25 billion (Rs 2 lakh crore) with the Indian banking sector being almost fully repaid.
“Essar’s aggregate revenues will stand at $15 billion (Rs 1.2 lakh core) and an AUM (asset under management) of $8 billion (Rs 64,000 crore) comprising various assets spread across India and overseas,” it said.
The company also said 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 UK of 3 million cubic metre capacity and a 20-MTPA port in India; metals & mining sector assets include a major iron ore mine and pellet project in the US; technology and services sector assets include global EPC (engineering-procurement-construction) business and IT solutions provider with centers across 30 countries,” the statement said.
Rewant Ruia, director at Essar Ports & Terminals, 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 of Essar Capital, said, “Essar is now repositioned for growth and resurgence. After consolidating our businesses over the past four 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.”
By monetising assets in a planned and strategic manner, that were built with earlier technologies over the last several years, Essar is now poised to reinvest in new assets with the latest, more efficient and ESG-compliant technologies to last the next several decades.
“Essar has planned significant investments in its core sectors of Energy, Infrastructure, Metals & Mining and Technology & Services. While ongoing businesses will provide operational stability, our renewed focus will be to Transition existing assets to Green and invest in sector-transforming clean businesses around the investment themes of Decarbonisation and Digitisation,” it said.
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