Essar Steel is showing interest in buying Stemcor’s Indian assets along with other giant steelmakers such as JSPL, Tata Steel, JSW Steel, Vale etc.
According to the sources, the London based company, Stemcor’s senior management asked the Essar Group founder Ravi Ruia to make an upfront payment and take away the assets. The assets of Stemcor are worth USD 800 million.
Essar Steel, a 14 MnTPA global producer of steel, is a fully integrated flat carbon steel manufacturer — with presence in Canada, USA, India and Indonesia. It is the most versatile flat steel producer with integrated facilities. It makes pipes and extra wide plates, as well as hot rolled, cold rolled, galvanized, color coated steel and pipe. It has the largest retail distribution network. Its products find wide acceptance in highly discerning consumer sectors such as hydrocarbon, automotive, white goods, construction, engineering and shipbuilding.
Essar will largely be benefited from these assets and will easily fulfill its needs for raw material. A spokesperson from Essar Steel said, “We keep looking at growth opportunities. However, it is not our policy to comment on any specific proposal.”
Essar Steel has more chances of getting hold on the assets because of their terms with Stemcor. Stemcor and Ruia share a great mutual understanding among them since very long. They also had a joint venture in India where they had set a 3 MnTPA capacity pellet plant in Vizag in 2001.
Stemcor assets are presently put on auction for the steelmakers. The assets include a pellet plant in Odisha, an iron ore mine and an underground slurry pipeline of 220 kms connecting them.
Meanwhile for the other steelmakers who are showing interest in buying the assets, Stemcor has asked them to place their initial bids. The auction will be held after around 6-8 weeks from now.