Essar Steel

Essar Steel was a common name of the steel manufacturing companies of the Essar Group of Companies. Its main subsidiary was Essar Steel India Limited, a fully integrated flat carbon steel manufacturer based in Mumbai, which owned and operated a integrated steel plant in Hazira, Surat district of Gujarat state.[1][2][3] In addition, it had also a beneficiation plant at Bailadilla, Chhattisgarh, and pellet plants at Visakhapatnam, Andhra Pradesh, and Paradeep, Odisha. There was an integrated steel plant underconstruction in Paradeep.[4]

After insolvency, Essar Steel India Limited was acquired by ArcelorMittal Nippon Steel India Limited.[5]

History

History of the company reach back to 1 June 1976 when specialised marine construction company Essar Construction Limited was incorporated as a part of Essar Group. Essar Steel was a division of Essar Construction, responsible for manufacturing of hot briquetted sponge iron.[6] On 19 August 1987, the company changed its name to Essar Gujarat Limited and on 4 December 1995, to Essar Steel Limited.[7]

In 1994–1995, a new plant for manufacture of hot rolled coils was commissioned in Hazira. A pelletisation plant was set up at Visakhapatnam. P.T. Essar Dhananjaya joint venture was formed in Indonesia for manufacturing of cold rolled products.[6]

In 2003, Essar in cooperation with Stemcor set up a cold rolled steel unit.[6]

In 2007, Essar acquired the Canadian steel mill Algoma Steel

Insolvency

The account had gone into corporate debt restructuring in 2002, with a debt of Rs 2,800 crore, according to an Economic Times report. However, it managed to exit the CDR ahead of schedule in 2006.[9]

A new cycle of distress began after the rapid expansion at Essar Steel’s Hazira steel operations at the turn of the decade. The expansion plan failed due to delay in environmental approvals and non-availability of natural gas, which was necessary for the plant to work at maximum efficiency. By 2015, the company was saddled with financial creditor dues exceeding Rs 49,000 crore. That year, the lenders made a first attempt to get the promoter family out of the driving seat at the company. At the time, the company was facing severe liquidity issues because of a drop in commodity prices and a failed expansion plan at its Hazira steel plant. At a meeting in November 2015, the lenders to Essar Steel, led by State Bank of India and ICICI Bank, had discussed the option of converting a portion of the company’s debt into majority equity, which could be sold to potential investors later.[10]

However, the plan was put on hold after the Ruia family told the lenders that they were willing to sell the company through an M&A process. The lenders appointed SBI Capital Markets and ICICI Securities as investment bank to look for potential buyers, however, they failed to find investor. While the search for a new bidder was on, the RBI concluded its asset quality review and asked banks to classify multiple large accounts, including Essar Steel, as non-performing assets by March 2016.[11]

List of Steel Plants

• ESSAR Steel India Limited, a fully integrated steel mill in Hazira, of the Surat district in Gujarat, India, with a steel-making capacity of 10 MTPA.[17]
• Essar Steel Minnesota LLC, a company located in U.S. state of Minnesota, was declared bankrupt and its assets and mining rights sold in June 2017.[18]
• Greenfield projects in Vietnam.
• Steel plant in Indonesia.
• Integrated steel plant in Trinidad and Tobago.[19] It has a current capacity of 10 MTPA which they plan to raise to 20 MTPA by 2028.[20]

See also

• ESSAR Steel India Limited — Essar Steel in India

External links

• official Essar Website