ArcelorMittal today said it has entered into a joint venture pact with Nippon Steel & Sumitomo Metal Corporation (NSSMC) to jointly acquire the assets of Essar Steel.
The company's arm ArcelorMittal India Pvt Ltd (AMIPL) had submitted a resolution plan for Essar Steel on February 12, which outlined the intention to have NSSMC formally join its bid for Essar Steel.
Essar Steel was among the initial 12 companies identified by the Reserve Bank of India (RBI) for insolvency proceedings.
"Should the submitted Resolution Plan be selected and formally accepted by India’s National Company Law Tribunal, ArcelorMittal and NSSMC would jointly acquire and manage Essar Steel," ArcelorMittal said in a statement.
In its Resolution Plan, the AMIPL set out a detailed industrial and turnaround plan aimed at restoring Essar Steel’s fortunes, enabling it to realise its full potential and participate in the anticipated steel demand growth in India, the statement said.
"Partnering with NSSMC for Essar Steel was always our intention and adds further strength to our offer. Combining our experience and expertise creates a powerful partnership that has a proven track record - our rich history of positive collaboration dates back more than 20 years with three joint ventures in the US," ArcelorMittal Chairman and CEO Lakshmi Mittal said.
"We believe that together we can contribute our knowledge and technology to support a rapid turn-around in Essar’s performance, enabling it to increase production, enhance its product capabilities and make a meaningful contribution to the future growth of India’s manufacturing sector and the development of its economy," he said.
ArcelorMittal and NSSMC have operated in Indiana, USA, under joint venture agreements since 1987.
More recently, in 2014, ArcelorMittal partnered with NSSMC on the acquisition of AM/NS Calvert, a state-of-the-art downstream finishing facility in Alabama, USA.
The facility, which opened in 2010 and has a 5.3 million tonne capacity, was the largest newly-constructed steel facility in the US in 40 years but had failed to reach its potential.
A major investment programme has been undertaken following the acquisition.
The programme focused on improving the facility’s finishing lines to enable the production of higher-added value steel products.
ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 18 nations.
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