In a letter to the investors and the media, company promoters said the group currently generates earnings of about Rs one trillion ($14 billion) per annum, mainly from its refinery in the UK.
“Armed with a substantially lighter balance sheet, Essar is now well poised to embark on a new phase of growth, while driving growth in its existing portfolio. Essar will continue to use its entrepreneurial skills, vast pool of human resources, and decades of experience and innovation in pursuing fresh opportunities and creating value for all its stakeholders,” the group’s promoters, Shashi, Ravi and Prashanth Ruia said.
A few years ago, the group took a conscious call to reduce its debt in response to the evolving global and domestic economic scenario and to the regulatory obstacles faced by its steel and power businesses. “Committed gas supply contracts for the Essar Steel complex were withdrawn in 2012 and allotted coal mines for power plants were cancelled in 2014, leading to partial closure of some of our prime operating assets. We have dealt decisively and proactively with these challenges and decided that it would be prudent to drastically reduce our borrowings,” the letter said.
The group repaid about Rs 1.4 trillion of debt to the banking system over the last three years. “The greenfield assets built by Essar have attracted significant foreign direct investment (FDI) of US $40 billion, which is reflective of the superior and world-class quality of our assets. The Essar Oil-Rosneft deal alone saw over Rs 86,000 crore of FDI, the country’s largest until date,” the promoters said.
Last year, the company lost its 10 mtpa steel complex to ArcelorMittal after banks took the company to the NCLT for a loan default. The group currently owns ports, mining and shipping and power projects in India and overseas.