Essar may take 83% in Suez Steel

The Essar group has emerged as the frontrunner for acquiring the Egyptian government's 83 per cent stake in Suez Steel, a 600,000-tonne billet company.

Investment banking sources said the Essar group's overseas investment arm Essar Global had been shortlisted for taking over Suez Steel, situated 5 km south of the Suez near the Red Sea coast.

HC Securities, a Giza-based investment bank, is handling the sale. The announcement of the successful bidder would take a fortnight, they added.

An Essar executive said the group had submitted an expression of interest (EoI) for the steel company, but was yet to hear from it.

"The group has continuously been looking for opportunities, and the EoI for the Egyptian company is in line with that initiative," he pointed out.

Although the financial details of the bid were unknown, industry sources said an investment of $100-150 million was needed for setting up a billet unit the size of the company. Billet is an important raw material for re-rolling production.

The sources said the successful bidder would also have to acquire the remaining 17 per cent from non-government shareholders at the same price.

Other bidders for the plant include the Al-Tuwairqi group, Al-Rajhi Steel, Egyptian National, and a consortium of investors.