Arcelor Mittal to Infuse More Capital to Acquire Full Control of Essar Steel

According to Mining News Pro -According to the latest updates, Arcelor Mittal has agreed for capital infusion of additional INR 8,000 crore to acquire full control of debt-laden Essar Steel thus making its total offer to INR 50,000 crore.

Banks have 24 hours to support or reject the offer. The meeting which started on Monday this week, was ended with final deal which that includes payments to unsecured creditors and full repayment to small operational creditors with dues of up to INR 1 crore. Workmen and employees are owed INR 18 crore and will also be paid in full, according to the agreement.

Secured lenders will get INR 42,000 crore on total debt of INR 49,000, a recovery of almost 86% for the steel asset — one of the highest among the 12 insolvent assets addressed by Reserve Bank of India’s (RBI) in its first list of defaulters in June last year.
With this the 14 months battle for the 10 MnT steel plant has completed its last lap to acquire Essar Steel.

ArcelorMittal’s offer has been given preference blenders over the proposal from metals conglomerate Vedanta Group who had offered to pay little lower than INR 35,000 crore upfront in cash. With this steel magnate Lakshmi Mittal has got most sought after footing in the growing Indian steel market after previous failed attempts since 2005 to set up a greenfield facility in Jharkhand and Karnataka.

Essar Steel, a flagship company of Ruia’s family owes INR 49,000 crore to various banks. The company has an integrated steel plant with a capacity of 10 MnT in Hazira, Gujarat.