The acquisition comes on the heels of ArcelorMittal
getting National Company Law Tribunal (NCLT) nod for the acquisition of the Odisha slurry pipeline. On Monday, the Cuttack Bench of NCLT
approved the Rs 2,359 crore resolution plan submitted by ArcelorMittal
India (AMIPL) for Odisha Slurry Pipeline Infrastructure (OSPIL).
An ArcelorMittal spokesperson said, “We welcome the judgment by NCLT
Cuttack approving our resolution plan for the OSPIL, having previously secured unanimous approval from the Committee of Creditors (CoC). The 253-km pipeline connects AM/NS India’s iron ore beneficiation plant in Dabuna to its pellet plant in Paradip in Odisha. Following approval by NCLT, we now look forward to completing the formalities that will see ownership of the asset transferred to AM/NS India.”
In December, after the Supreme Court paved the way for the completion of the Rs 42,000 crore Essar
Steel acquisition, the CoC of OSPIL selected ArcelorMittal’s upfront payment offer. However, the resolution plan was challenged by Thriveni Earthmovers and Srei Infrastructure Finance, a financial creditor of the corporate debtor.
Sources in the know said, last week Thriveni withdrew its application from the NCLT
and ArcelorMittal’s resolution plan was approved.
The 253-km slurry pipeline is an important ancillary unit for AM/NS India. The pipeline connects the Dabuna plant with the 12 million tonne (mt) Paradip pellet plant. The pellets, a raw material feed for the steel plant, are shipped to Hazira.
While AM/NS India has secured some ancillary units — like the slurry pipeline and power plant — the captive port facilities are still controlled by Essar group promoters.
In the meantime, steps were also being taken to get captive raw material resources in place. Earlier this month, AMIPL was selected preferred bidder for an iron ore mine licence in Odisha through an auction.
The Thakurani block in Keonjhar district has estimated reserves of 179.26 mt, and is expected to contribute to AM/NS India’s long-term raw material requirements. With the licence, AMIPL will seek requisite clearances, as well as mine development and production agreements, ahead of commencing operations, the company said.
Dilip Oommen, chief executive officer of AM/NS India, said, “We are pleased to have acquired these important ancillary assets for our steelmaking facilities. This is with the intent to secure a robust captive power and commodity supply chain as we continue to make strong strides in our production and operational performance.”
“Efforts to become increasingly self-reliant, in this case through the procurement of a key energy source in Gujarat and an iron ore rich reserve in Odisha, form part of AM/NS India’s medium- to long-term strategy to significantly grow production capacity,” he added.
AM/NS India has an achievable capacity of around 8.5 mt and the long-term plan is to take it to 12-15 mt.