ArcelorMittal and Nippon Steel India (AM/NS India) aims to increase production capacity to 12-15mn mt from 9.6mn mt per annum over the long term with an investment of Rs20,000 crore ($281.8mn). Post acquisition, Essar Steel has been renamed as AM/NS India, the new entity is owned jointly 60pc by ArcelorMittal owns and 40pc by Nippon Steel.
The integrated flat steel producer is currently producing 7.5mn mt per annum. The company plans to increase finished steel sales to 8.5mn mt per annum in the short term. It also has iron ore pellet facilities in Odisha, with annual capacity of 14mn mt per year that has been idle for more than a year.
AMNS India will be led by Aditya Mittal as a chairman, who is president and chief financial officer of ArcelorMittal along with Dilip Oomen as the chief executive, who held the same position in Essar Steel.
Essar Steel was auctioned under India’s Insolvency and Bankruptcy Code after it was referred for debt resolution proceedings by the central bank. In November, India’s Supreme Court approved a combined bid of Rs42,000 crore submitted by ArcelorMittal and Nippon Steel for the stressed assets of Essar Steel. The total acquisition amount is Rs50,000 crore ($7.04) or JPY770bn, of which Rs8,000 crore will be utilised for capital expenditure and working capital requirements.
($1 = Rs70.96)