Essar pulls out of race to buy Nokia's cellphone making plant in Chennai

Essar was one of the 3 companies which showed interest in the plant

Essar Group today said that it is no longer interested in the Nokia's plant, which was frozen by Income Tax in an alleged Rs 21,000 crore tax dispute, near Chennai. Essar was one of the companies which had shown interest in the plant, which suspended operations on November 1, 2014.

Earlier, Shashi Ruia, chairman of Essar Group said that Essar is evaluating buying Nokia's facility at Sriperumbudur, near Chennai. He was hopeful that Essar can skill them and turn them into operators in 15 days.

His group was planning to use this facility for electronics products, which is estimated to be worth $40 billion every year. Import of electronics will is expected to surpass oil. Ruia also noted mobile handset import would be touching around Rs one lakh crore next year compared to Rs 75,000 crore now.

"In recent times there has been a spate of media reports on Essar acquiring Nokia's Chennai plant. Essar confirms that it is no longer pursuing the deal and therefore categorically denies the media speculation around this subject," Essar said in a statement.

The company spokesperson did not comment further on this and did not give any reason why the company pulled out from the race.

Earlier Tamil Nadu Government officials have said that three companies have shown interest in acquiring Nokia's plant. However, they did not disclose the names of the companies.

Nokia could not transfer the asset to Microsoft, which acquired Nokia's mobile devices business globally for about $7.5 billion, due to the tax dispute. Over 30,000 people, directly and indirectly, have lost their jobs.

Nokia earlier sought Delhli High Court's permission to sell the plant and keep the amount in escrow account till the matter is resolved but the I-T department. The Delhi High Court, which ordered to appoint consulting firm Ernst & Young India as valuer of the plant, is going to hear the matter on May 26.