essar group becomes debt free after repaying $25 billion

Essar Group becomes debt-free after repaying $25 billion

Reuters | | Posted by Nisha Anand

Essar Group has become debt-free, having settled the remainder of its $25 billion debt after the sale of two ports and a power plant to ArcelorMittal Nippon Steel Ltd (AM/NS), the group said on Monday. Essar, built by brothers Shashi and Ravi Ruia, has sold some of its assets in sectors such as telecom, oil refining and steel over the years to settle its $25 billion debt.

Its steel business, operated through Essar Steel, was acquired by a joint venture of ArcelorMittal and Japan’s Nippon Steel & Sumitomo Metal Corp.

Essar Ports and Terminals Ltd and Essar Power Ltd on Monday concluded the $2.05 billion sale of a 270 megawatt (MW) power plant and 25 million tonne per annum(mtpa) port at Hazira in the west and a 12 mtpa port at Paradip in the east to AM/NS.

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“Essar has concluded its asset monetisation programme and completed the debt repayment of $25 billion effectively making the group debt-free from Indian banks and financial institutions,” Prashant Ruia, director, Essar Capital, said in a statement.

AM/NS, which agreed to buy some infrastructure assets from Essar group for $2.4 billion, in a statement said that the ports and the power plant are captive to its India’s operations and are expected to generate operation synergies for the company.

It said acquisition of a 515 MW gas based power plant at Hazira, 16 mtpa deep draft terminal at Visakhapatnam in southern India and a Gandhar – Hazira transmission line will be concluded after obtaining regulatory approvals.

Acquisition of these assets will help move raw materials and finished goods between the company’s manufacturing facilities in western, eastern and southern India.

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