Mittal may take over Bhushan

Steel major ArcelorMittal plans to acquire stressed assets of Bhushan Steel in a bid to enter Indian steel market, sources told this newspaper.

Sources said the company has submitted an expression of interest for Bhushan Steel, which has been referred to National Company Law Tribunal (NCLT) under the insolvency and bankruptcy code. This, sources said, will help the company acquire the steel assets in India.

The steel major, which has so far not been able to make much progress in the Greenfield projects in India, is planning to take the merger and acquisition route to enter into the steel market in India. As part of the strategy, the company earlier picked up stake in Uttam Galva Limited in 2009.

In 2015, the company signed an MoU with public sector undertaking Steel Authority of India Limited (SAIL) for a Rs 5,000 crore joint venture for automotive steel facility. The two companies, sources said, are working hard to finalise a deal.

Though there has been no official comment on the company’s latest bid, an ArcelorMittal official, when contacted by The Sunday Guardian, said we do not comment on rumours and speculations.

Bhushan Steel has good presence in auto steel categories with a 5.6 Million Tonne (MT) integrated steel unit in Odisha. The company owes nearly Rs 42,000 crore to lender banks and was admitted into NCLT in July this year. 

The company took its first step to enter India in October 2005, when it signed an MoU with the Jharkhand government for the 12 MT plant. Subsequently, the company signed an MoU with Karnataka and Odisha as well for the Greenfield projects. The three Greenfield projects together would have added to the steel manufacturing capacity by 30 MTPA with an estimated investment of over Rs 100,000 crore.

However, later on the company pulled out of its Odisha project because of delay in clearances. The Jharkand project also has not seen much progress.

India, this is to be noted, became the third largest producer of steel in 2015 and is now well on her track to emerge as the second largest producer of steel after China. At present Japan is the second largest producer.