Essar to pump Rs 35,000 crore into Gujarat for steel manufacturing project
After exiting two of its most prized assets in Gujarat — the refinery and steel facilities, the Ruias-controlled Essar group is once again exploring the state for several big-ticket projects.
These include setting up a commercial port, new and emerging technologies, EV vehicles and lithium-ion manufacturing facility, renewable energy, petrochemicals and even a steel project. The company has drawn out plans to invest about $5 billion (roughly Rs 35,000 crore) for a steel manufacturing project in Gujarat, said sources close to the development.
The promoters of Essar Group had last year lost a long-draw the battle to wrest control of the bankruptcy-ridden Essar Steel at Hazira which it had built from a scratch. The stressed steel plant project of 10 million tonnes per annum capacity went into insolvency proceedings and was bagged by ArcelorMittal Nippon Steel India Ltd.
Senior executives of Essar Group met top Gujarat government officials last week to discuss various plans. The company has also submitted a proposal to set up a steel plant with 8 million tonnes of annual capacity for which it has sought land from the state government.
“The company is looking for land near coastal areas that have good port connectivity,” said a senior state government official. For the proposed steel plant the company requires land of about 1,000 hectares, said sources in the know of the development. The $5 billion proposal does not include land and infrastructure cost of a captive port and captive power plant, said sources.
The ArcelorMittal led joint venture’s winning bid involved a debt restructuring plan to the tune of Rs 42,000 crore and further investment of Rs 8,000 crore for ramping up its capacity. Essar group promoters had proposed to repay about Rs 55,000 crore to the creditors however the offer was not accepted by the committee of creditors for Essar Steel. Essar group and ArcelorMittal are presently locked in a legal battle to wrest control of the captive port at the steel plant facility at Hazira.
When contacted, an Essar group spokesperson said that senior executives have been visiting senior government officials to discuss their current investments in ports and power sector in Gujarat.
Essar Group has also proposed to set up an LNG terminal at Hazira and also drawn out plans to enter into solar and wind energy generation and coal bed methane projects in Gujarat, said sources.
For the port project, the group has chalked out plans to invest about Rs 10,000 crore, according to sources.
The Essar group promoters, who sold the refinery project near Jamnagar for $12.9 billion to Russia’s Rosneft led consortium, is also planning to set up a petrochemical complex. For this the group is looking at options within India, including Gujarat and also overseas, said sources.
Last year in October, Essar group promoters said that they paid off Rs 1.4 lakh crore debt and that the residual 10-15% would be cleared shortly. Essar group took steps towards reducing leverage by exiting from Essar Oil and selling it off to Rosneft-Trafigura consortium in 2017.
This was followed by the company’s exit from Aegis, their BPO business. The group carried out a few more exits and used the proceeds from this monetisation, exercise to repay about Rs 1,40,000 crore of debt, which is seen as the largest deleveraging exercise by an Indian corporate.
The company is in good shape with the top line of the portfolio the business of over $13 billion or Rs 1,00,000 crore, the group, director of Essar Capital said Prashant Ruia, in an internal message posted on the group’s website last October.
Source : https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/essar-to-pump-rs-35000-crore-into-gujarat-for-steel-manufacturing-project/articleshow/78825384.cms
Date : Oct 23, 2020