Essar to sell port & power infrastructure to ArcelorMittal Nippon Steel for `19,000 crore

New Delhi: Essar group on Friday announced the signing of a $2.4 billion (Rs 19,000 crore) deal to sell certain ports and power infrastructure to ArcelorMittal Nippon Steel in one of the largest post-pandemic merger and acquisition deals in India.

In a statement, the Ruia-run firm said the deal also envisages a 50-50 joint venture between Essar and ArcelorMittal for building a 4 million tonnes a year liquefied natural gas (LNG) import terminal at Hazira in Gujarat.

Without giving details, it only identified certain ports and power infrastructure that are primarily captive to operations of the Hazira steel plant, which was acquired by ArcelorMittal Nippon Steel (AM/NS) in 2018-19, as part of

the deal.

Separately, AM/NS India in a statement said the deal covers port assets in Gujarat, Andhra Pradesh and Odisha as well as two power plants at Hazira and an electricity transmission

line.

AM/NS India had acquired Essar Steel for around Rs 42,000 crore in bankruptcy proceedings in 2018-19 and had claimed the acquisition had given it the right to the licence of port operations. But Essar Bulk Terminal, part of the Essar group, opposed it saying the Hazira port was not a part of the bankruptcy

process.

The matter went to the courts where it was being argued. The two have now reached an agreement over it.

AM/NS said the deal covers a 25 million tonnes per annum capacity jetty at the all-weather, deep draft bulk port terminal at Hazira, Gujarat, captive and adjacent to the Hazira steel plant.

It also includes a 16 million tonnes all-weather, deep draft terminal at Visakhapatnam, Andhra Pradesh along with an integrated conveyor connected to AM/NS India's 8 million tonnes a year iron ore pellet plant in the port city.

A 12 million tonnes deep-water jetty at Paradip, Odisha along with a dedicated conveyor that handles 100 per cent of pellet shipments from AM/NS India's Paradip pellet plant is also part of the deal.

The deal also includes a 270 MW multi-fuel power plant at Hazira, which has a long-term power purchase agreement with the adjacent steelmaking facility. A 515 MW gas-based power plant, along with allied land, is also part of the transaction.

And so is a 100-kilometer Gandhar to Hazira transmission line, connecting AM/NS India's steelmaking complex with the central electricity grid, the firm said.

"The transaction is expected to be funded only by AM/NS India," it added.

Essar said the deal signed with ArcelorMittal also envisages a 50-50 joint venture partnership for building a 4 million tonnes a year liquefied natural gas (LNG) import terminal at Hazira, Gujarat.

Hazira already has a 5 million tonnes a year LNG import facility operated by

Shell.