In one of the largest post-pandemic M&A deals in India, Essar has signed definitive agreements with Arcelor Mittal Nippon Steel (AM/NS) 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 4 MTPA LNG terminal at Hazira, Gujarat, between Essar and ArcelorMittal.
With this deal, Essar will conclude its planned asset monetisation programme and complete the debt repayment plan of $25 billion (₹2,00,000 crore) with the Indian banking sector being almost fully repaid. Essar’s aggregate revenues will stand at US$ 15 billion (~₹1.2 lakh core) and an AUM (Asset Under Management) of US$ 8 billion (₹64,000 crore) comprising of various assets spread across India and overseas.
These assets under Energy sector include a 10 MTPA refinery in the United Kingdom (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 meter capacity and a 20 MTPA Port in India; Metals and Mining sector assets include a major iron ore mine and pellet project in USA; Technology and Services sector assets include Global EPC business and IT solutions provider with centers across 30+ countries.
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.
Rewant Ruia, Director, 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, Essar Capital said, “Essar is now repositioned for growth and resurgence. After consolidating our businesses over the last four years, we have now entered the next growth phase focussed on helping build a sustainable energy future that will impact lives and livelihoods for a greener world.”
Essar has planned significant investments in its core sectors of Energy, Infrastructure, Metals and Mining, and Technology and Services. While ongoing businesses will provide operational stability, its 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.
The closing of the M&A deal is subject to completion of certain corporate and regulatory approvals applicable for respective assets.