Keen to gain a firm foothold in India through acquisition of debt-laden Essar Steel, ArcelorMittal today said “a swift decision” on the case will be in the best interest of all stakeholders. Unable to register its presence in India for more than a decade, the world’s largest steel maker is eyeing entry in Indian steel market, which it believes has high growth potential, through Essar acquisition. “We at ArcelorMittal believe, we are uniquely qualified to ensure Essar can actively participate in future Indian steel demand growth…A swift decision and conclusion is in the best interest of all stakeholders,” Brian Aranha, executive VP and head of strategy, Arcelor Mittal said here.
The Committee of Creditors (CoC) on Wednesday had met representatives of ArcelorMittal and Numetal which are in the race to acquire Essar Steel regarding their eligibility and a decision is awaited. Terming his company the “most credible owner” of Essar Steel, Aranha said ArcelorMittal viewed Essar acquisition as a compelling opportunity for the company to enter the Indian steel market.
“Our offer for Essar sets out an industrial plan aimed at improving its performance and profitability. The offer also includes a detailed investment plan to address operational issues in Essar’s asset base. Intention is to run the operation and move production closer to its nameplate capacity,” Aranha said. He said it is ArcelorMittal’s aspiration to increase Essar Steel’s output in long term to 15-20 million tonne per annum (MTPA) from the current about 6 MTPA.
He highlighted how ArcelorMittal and Nippon Steel & Sumitomo Metal Corp (NSSMC) partnership has a proven track record of long-term success. “We have best-in-class operational capabilities and turnaround expertise besides experience in setting up and managing large-scale, multi-site plants,” Aranha said adding the company also has the best-in-class commercial practices across products, customer segments and geographies in addition to optimal global sourcing and logistics.
He said if its bid is successful it would help India bridge its supply-demand gap and make a significant contribution to the Make-in-India initiative. “Essar will require significant additional capital expenditure and investment in new steelmaking, casting and rolling facilities. Besides, we will develop a research and development centre in Hazira,” he said.
ArcelorMittal had bid for Essar Steel on February 12. The second company to submit resolution plan was Numetal. The SBI-led consortium of creditors rejected both the bids, finding them ineligible under Insolvency and Bankruptcy Code (IBC). ArcelorMittal had been trying for long to enter India but could not get any success so far.