According to a recent press release, ArcelorMittal India Private Limited (AMIPL) has submitted an offer for Essar Steel India Limited in-line with the corporate insolvency resolution process for Essar. Financial details of the offer are not presently available.
Mr. Lakshmi Mittal, Chairman and CEO, ArcelorMittal, stated “Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian steel market. The offer submitted today by AMIPL includes a detailed investment plan to address operational issues in Essar’s existing asset base and our industry expertise.” Essar Steel is an integrated flat steel producer with the main production facility in Gujarat, India. It has a nameplate crude steel capacity of 9.6 million mt annually, although the current maximum achievable crude steel production level is 6.1 million mt annually per annum, due to a bottleneck in the steelmaking and casting process. According to market valuations, Essar Steel could fetch a valuation of at least $6 billion in a sale according to some valuation reports. The company was owned by billionaire brothers Shashi and Ravi Ruia before being brought under the insolvency resolution process in August 2017.
Tata Steel decided not to proceed with an offer while a consortium led by Russia’s VTB Group has also reportedly submitted an offer. The VTB consortium has submitted a bid through a Mauritius-based investment vehicle called Numetal, in which the Russian financial group is the largest shareholder. The investor group is also backed by Ravi Ruia’s son, Rewant Ruia, as well as a several other partners.
ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 18 countries.