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Essar Steel Acquires Shree Precoated Steel Business For Rs 600 Cr

05 August, 2009

Essar Steel Ltd has agreed to acquire the entire assets and steel business of Shree Precoated Steels Ltd. The two companies have entered into a definitive business transfer agreement. The deal size is is said to be between Rs 600-650 crore, and the agreement is subject to regulatory and other approvals.

Shree Precoated is an unlisted firm controlled by the Ajmera group which was demerged earlier this year from the listed entity. Bombay High Court gave an approval to a demerger of the steel division of Shree Precoated Steels and the transfer of this division to an unlisted company called Ajmera Precoated Steels to form a new company also called Shree Precoated Steels.

Shree Precoated Steels, which was the listed entity earlier, is now known as Ajmera Realty & Infra, which is involved in real estate business. Ajmera trades on both BSE and NSE.

The deal would give Essar Steel a 2 million tonne capacity in high-value category in manufacturing called  cold rolled steel making. The deal would add Rs 2,600 crore to Essar Steel’s topline and  Rs 200 crore to the bottom line. Shree Precoated’s plant is located at Sanaswadi near Pune,  which is one of the largest steel consuming centre.

”This acquisition is a strategic fit for our steel business as this gives us leadership position in many product segments and also gives us a foot print across different product segments,” said J. Mehra,

CEO, Essar Steel Business Group.

Ernst & Young acted as the sole financial advisors to this transaction.


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Essar Steel Acquires Shree Precoated Steel Business For Rs 600 Cr

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