27 May 2019: ArcelorMittal is exploring a joint offer with Resurgent Power Ventures Pte to buy an Essar Power generation plant in India, according to people with knowledge of the matter.
The companies have held preliminary talks on a potential joint bid for the 1,200-megawatt power plant in the central Indian state of Madhya Pradesh, said the people, asking not to be identified because the information is private. Arcelor had previously made a non-binding offer of 48 billion rupees ($690 million) for the asset, Bloomberg News reported in February.
Adding Resurgent Power to the bid would help Arcelor, the world’s largest steel producer, gain control of the power plant without putting as much strain on its balance sheet. Tata Power Co. owns 26% of Resurgent Power, while ICICI Bank Ltd. and the sovereign wealth funds of Oman and Kuwait hold the rest, according to a January statement.
Deliberations on the joint offer are still ongoing, and there’s no certainty a deal for the power plant will emerge, the people said. Representatives for Arcelor and Essar declined to comment. A representative for ICICI Ventures also declined to comment. Tata Power said in an emailed statement that it doesn’t comment on market speculation.
Arcelor, led by steel tycoon Lakshmi Mittal, and the Essar group’s founding family have been slugging it out in court for control of Essar Steel India Ltd., which was being sold under India’s bankruptcy process. The Madhya Pradesh power plant, which supplies electricity to Essar Steel, would boost Arcelor’s attempts to gain a foothold in the Indian market.
Last year, a consortium including Arcelor was picked by lenders as the winning bidder for Essar Steel with an offer of 420 billion rupees. The plan was halted by the nation’s top court last month pending a review by a bankruptcy tribunal hearing appeals.