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| Essar Steel to buy Shree Precoated for Rs 600cr |
| Press Trust of India / Mumbai Aug 04, 2009, 20:10 IST |
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Essar Steel today entered into an agreement with secondary steel maker Shree Precoated to acquire city-based Ajmera Group's steel business and fixed assets for Rs 600 crore, a step which will make it the country's largest cold-rolled steel maker.
Essar Steel would also acquire Rs 175 crore long-term debt of Shree Precoated Steels and the net current assets and liabilities of the company, the valuation of which is underway, Essar Steel Chief Executive Officer J Mehra said here.
"We will be able to tell the exact valuation of the deal once we get the total value of the current assets and liabilities of Shree Precoated Steels," Mehra said, adding that the transaction would be over within 60 days from the date of signing of the business transaction agreement.
Essar Steel proposes to fund the deal mostly through internal accruals. The company has around Rs 900 crore liquid at the moment.
With the acquisition, Essar Steel's topline would rise by at least Rs 2,600 crore and bottom line by around Rs 200 crore a year and catapult the Ruias-owned steel firm as the largest cold-rolled and colour coated steel maker in the country.
Shree Preacoatde Steels has 4,00,000 tonnes per annum colour coating line, 6,00,000 per annum cold rolling mill, 5,00,000 tonnes of galvanising line and 6,50,000 tonnes of pickling line at its plant at Sanaswadi near Pune in Maharashtra.
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