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| Essar completes Shree Precoated Steels buyout |
| Press Trust of India / Mumbai Nov 11, 2009, 20:17 IST |
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Ruias-promoted Essar Steel today said it has completed the acquisition of steel assets of Shree Precoated Steels of the Ajmera Group, at a consideration of about Rs 1,200 crore.
On August 4, Essar Steel announced its agreement with Shree Precoated Steels to acquire the fixed assets and steel business.
"The total value of the fixed and current assets acquired is approximately Rs 1,200 crore. This is funded through a mix of debt and equity," Essar Steel said in a statement.
Essar Steel had said that with the acquisition, its topline would go up by at least Rs 2,600 crore and bottomline by around Rs 200 crore a year.
With the completion of this acquisition, Essar Steel would now have the largest cold rolling capacity ( two million tonnes), the largest colour coating facilities (0.4 million tonnes), galvanising capacity of 1.0 million tonnes and pickling capacity of 2.2 million tonnes in the country.
Almost 80 per cent of the the colour coated products produced in the Pune plant of the acquired company goes to the export market.
The domestic market for colour coated products is also growing at over 30 per cent to increasing urbanisation, Essar Steel said, adding that the company would utilise its network of service centres and hyper marts as a distribution channel to market the products from this plant.
"Going forward, it is important for the steel companies to widen the product base. This acquisition is aimed at achieving that objective. We will be able to capitalise on the synergies offered by this plant through technical expertise of Essar Steel," Malay Mukherjee, chief executive officer, Essar Steel said.
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