The Committee of the creditors of the steelmaker indian Essar Steel has approved on Friday the acquisition of this company in difficulty by the global giant steel ArcelorMittal and japan’s Nippon Steel for $ 5.7 billion, has announced ArcelorMittal in a press release. This agreement constitutes the one of the buybacks, the most important of the indian company in default since the adoption of a national bankruptcy law, which entered into force two years ago.
“ArcelorMittal will have the majority of the capital of Essar Steel,” said a spokesman for the steelmaking group without revealing the exact share held by ArcelorMittal in its joint venture with Nippon Steel. “India is one of the most promising markets in the world, with a significant growth potential in the medium and long term, and where the steel products manufactured in the country have an important place,” said Nippon Steel in a statement.
Measures the pro-business
The indian central Bank had opened an insolvency procedure aimed at Essar Steel in August 2017. The legislation adopted the previous year in India, has simplified the recovery of firms in difficulty by profitable companies, in the wake of measures, pro-business government of Narendra Modi, which is committed to tackling bad debt, that weigh on the indian banks.
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ArcelorMittal had said on 19 October that he had been chosen as a bidder, principal of the indian company, and have approved a payment of nearly one billion dollars, including arrears of debt. Founded in 1976, Essar Steel has achieved a turnover of 219,6 billion rupees in 2016 (2.6 billion euros), and offers a production capacity of 10 million tonnes.
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Many manufacturers, including the indian Vedanta and JSW Steel, they had also submitted bids to compete with that of the tandem Nippon Steel-ArcelorMittal. The new owners hope to take advantage of the growth of domestic demand for steel, fueled by infrastructure projects of this scale.