Essar Steel (ESL) has completed the acquisition of the steel assets of Shree Precoated Steels (SPSL) at a cost of Rs 1,200 crore. The acquisition had been funded through a mix of debt and equity, Essar Steel said.
The assets that have been acquired include the plant comprising the colour coating line (annual capacity 400,000 tonnes), cold rolling mill (600,000 tonnes), galvanising line (500,000 tonnes) and pickling line (650,000 tonnes). The plant is located at Sanaswadi near Pune in Maharashtra.
The acquisition is a step towards enhancing Essar Steel’s portfolio with integrated facilities from heavy plates, hot rolling, cold rolling, galvanising and colour coating, besides the full distribution business with the service centre and Steel Hypermarts.
ESL Director (Finance) Mahadev Iyer had said earlier SPSL would add Rs 2,600 crore to the company’s top line and Rs 175-200 crore to its operating profit in the next few years.
Essar Steel CEO Malay Mukherjee said: “Going forward, it is important for the steel companies to widen their product base. This acquisition is aimed at achieving that objective. We will be able to capitalise on the synergies offered by this plant through the technical expertise of Essar Steel.”
With the completion of this acquisition, Essar Steel will have the largest cold rolling capacity (2 million tonnes), the largest colour coating facilities (0.4 million tonnes), a galvanising capacity of 1 million tonnes and a pickling capacity of 2.2 million tonnes in the country.