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Steel News November 19, 2019 08:30:40 AM

ArcelorMittal Clears Final Hurdle in Essar Steel Acquisition

Paul Ploumis
ScrapMonster Author
The acquisition will mark the entry of the steel conglomerate into India and make it the fourth largest steel producer in the country.
ArcelorMittal Clears Final Hurdle in Essar Steel Acquisition

SEATTLE (Scrap Monster): ArcelorMittal India Private Limited (AMIPL) announced that it expects to close the acquisition of Essar Steel India Limited (ESIL) assets located at Hazira, Surat District in Gujarat by end of the current year. This follows the unconditional approval of its resolution plan for Essar Steel by the Supreme Court of India. The acquisition will mark the entry of the steel conglomerate into India and make it the fourth largest steel producer in the country.

According to company press release, the approval by the top Indian court is the final procedural step in the insolvency process. The transaction is now expected to be completed before the end of the current year. Upon completion, Essar Steel will be jointly owned and operated by ArcelorMittal and Japanese Nippon Steel Corporation, in accordance with the joint venture agreement signed by the two companies.

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As part of its bid to acquire Essar Steel assets, ArcelorMittal and Nippon Steel had agreed to pay an upfront amount of INR 42,000 crore in cash to the financial and operational creditors. The three-judge bench of the Court allowed ArcelorMittal to pay creditors.

Simultaneously, the court also nullified the earlier order by the National Company Law Appellate Tribunal (NCLAT) that had granted secured and unsecured lenders equal right over sale proceeds. The bench ruled that financial creditors enjoy primacy over operational creditors.