AM/NS India has acquired two port assets and a power plant from the Ruias of the Essar group for $2.05 billion (Rs 16,500 crore), ring-fencing the company’s present operations and future expansion in the country.

Building on the successful acquisition of Essar Steel from a bankruptcy court in 2019, AM/NS — the joint venture between ArcelorMittal and Nippon Steel — acquired these support infrastructure assets which are critical to the company’s 8.6 million tonne (mt) plant at Hazira, Gujarat and proposed expansion to 15mt.

The transaction, fully funded by AM/NS India, follows an August 2022 agreement with Essar to acquire several power and infrastructure assets that are either captive or allied to AM/NS India’s operations and will strengthen the strategic integration of the company’s manufacturing and logistics chain, the company said in a statement.

The assets include a 25mt all-weather, deep draft bulk port terminal at Hazira, Gujarat, captive and adjacent to the steel plant, a 12mt deep-water jetty at Paradip, Odisha along with a dedicated conveyor that handles 100 per cent of pellet shipments from AM/NS India’s Paradip pellet plant and a 270mw multi-fuel power plant at Hazira, which has a long-term power purchase agreement with the steel plant.

These assets are now wholly owned and operated by AM/ NS India and expected to generate operational synergies for the company immediately. All the necessary approvals are in place for the acquisitions.

The August agreement, valued at $2.4 billion, also included a few other assets for which regulatory approvals are pending. They include a 515MW gas-based power plant at Hazira, a 16mt all-weather, deep draft terminal at Visakhapatnam and the 100km Gandhar-Hazira transmission line.

In a statement, Dilip Oommen, chief executive officer, AM/NS India, said, “This transaction marks a major milestone in our ongoing efforts to strengthen AM/NS India’s energy and logistics supply chain. Owning these strategically located assets also supports our recently announced decision to proceed with a Rs 60,000-crore capacity expansion plan at Hazira, including the ability for AM/ NS India to realise additional synergies from rising throughput at the port assets in both Gujarat and Odisha”.

Even as AM/NS acquired Essar Steel following a bitterly contested legal battle that went all the way up to the Supreme Court, they continued to spur for the support infrastructures which were housed under separate companies and not part of Essar Steel’s bankruptcy process. It appears the two warring entities are unfolding a new chapter.

In a separate statement, Prashant Ruia, director, Essar Capital, said, “Essar has concluded its asset monetisation programme and completed the debt repayment of $25 billion (Rs 2 lakh crore) effectively making the group debt-free from Indian banks and financial institutions.”

Rewant Ruia, director of Essar Ports Terminal, said: “We are now reinvesting in our existing operations and in building new assets, both in India and overseas, with more efficient, latest and carbon-neutral new-age technologies, which will be sustainable.”

Essar Group says it has a revenue of Rs 1.5 lakh crore and assets under management of Rs 64,000 crore. Its major asset is Stanlow Refinery in the UK, a coal bed methane block in Ranigunj, Bengal, port and power plant at Salaya, next to the oil refinery which Essar sold to Rosneft of Russia.