ArcelorMittal on Monday said “completion of the Essar Steel transaction is now expected before the end of the year,” following the receipt and review of the formal written order, ArcelorMittal India Private Limited’s (‘AMIPL’) resolution plan for Essar Steel India Limited (‘ESIL’) which was approved by the Supreme Court on Friday.
The acquisition will mark the entry of the world’s largest steel company into India, which has emerged as the second biggest steel market in the world. Following its acquisition of Essar Steel, ArcelorMittal will be the fourth largest steel producer in the country which has set a target of achieving 300 million tonne in production in a government-backed initiative that is expected to see bug ticket investment in infrastructure.
“After completion, ArcelorMittal will jointly own and operate ESIL in partnership with Nippon Steel Corporation (‘Nippon Steel’), Japan’s largest steel producer and the third largest steel producer in the world, in-line with the joint venture formation agreement signed by the two companies, ” an official statement said.
The Supreme Court approval of AMIPL’s resolution plan is the final procedural step in ESIL’s corporate insolvency process, it added. Last year, ArcelorMittal and its partner Nippon Steel had offered to pay an upfront amount of Rs 42,000 crore (roughly around $5.8 billion) in cash to creditors as part of its bid for Essar Steel.
The Supreme Court on Friday allowed ArcelorMittal to pay creditors for Essar Steel India and scrapped a bankruptcy appellate tribunal’s order that had given secured and unsecured lenders equal right over the sale proceeds, according to a ruling by three-judge bench headed by Justice Rohinton F Nariman.
Source: Economic Times