Arcelor seals Odisha deal to procure iron ore for Essar Steel.
Bhubhneshwar:-NBFC Srei Infrastructure Finance Ltd, which held a 69.81% stake in Odisha Slurry Pipeline Infrastructure Ltd, continues to dispute the transaction.ArcelorMittal/Nippon Steel India, formerly Essar Steel India Ltd, has posted a lower EBIDTA of $107 million (Rs 8,025 crore) during the April-June quarter compared with $140 million (Rs 10,500 crore) in January-March.
ArcelorMittal has completed the acquisition of Odisha Slurry Pipeline Infrastructure Ltd (OSPIL) for a net consideration of Rs 1,860 crore, filling a much needed gap in its supply chain logistics to procure iron ore for Essar Steel. ArcelorMittal had acquired Essar Steel for Rs 42,000 crore in partnership with Nippon Steel of Japan.
The pipeline is a key infrastructure to ferry ore from the mine heads inside Odisha to the Paradip port without depending on road or rail network. The ore is then converted to pellets, loaded in ships and taken to Hazira in Gujarat where the Essar plant is located.
The company acted on an NCLT Cuttack order of March 2 and paid off the creditors, led by IDBI, earlier this month. It also inducted three directors on the board of OSPIL.
However, Calcutta-based NBFC Srei Infrastructure Finance Ltd (SIFL) — a fund sponsored by Srei and which held a 69.81 per cent stake in OSPIL — continues to dispute the transaction. SIFL, which had also lent Rs 321 crore to the pipeline, did not accept the fund transferred by ArcelorMittal as part of the resolution plan and kept the amount in an escrow account.
It had challenged the NCLT order at the appellate tribunal in Delhi soon after the March order but hearing on the matter was delayed because of the lockdown and other restrictions. The matter may come up for hearing next week.
“The matter is sub-judice; the resolution professional of Odisha Slurry Pipeline and the committee of creditors will be violating the judicial orders if they consummate the transaction,” a Srei spokesperson said.
ArcelorMittal/Nippon Steel India, formerly Essar Steel India Ltd, has posted a lower EBIDTA of $107 million (Rs 8,025 crore) during the April-June quarter compared with $140 million (Rs 10,500 crore) in January-March. Crude steel production also fell to 1.2 million tonnes (mt) from 1.7mt in the preceding quarter.