Essar Steel has completed its $1.58 billion acquisition of Canadian steel maker Algoma Steel Inc. The company became a wholly owned subsidiary of Essar Global Holdings, the umbrella organisation of all Essar group companies. Algoma is an integrated steel producer based in Sault Ste. Marie, Ontario with capacity of 2.4 million tonne per annum. The company would be part of Essar’s global steel operations. Essar had earlier announced a $ 500 million capacity expansion plan for Algoma.
Shashi Ruia, Chairman, Essar group said, “Algoma is the keystone of our expansion into the North American markets.” In April this year, Essar had said it would acquire Algoma in an all cash deal of $1.84 billion. The group is planning to inject $500 million from equities to fund the Algoma acquisition while it is learned that the company has UBS as advisors for raising $900 million debt to fund the acquisition. However, an Essar spokesperson declined to comment on the financial details of the acquisition.
Denis Turcotte will continue as Chief Executive Officer of Algoma Steel Inc. In April Essar had acquired US iron ore maker Minnesota Steel. The US firm would provide 1.4 billion tonne of iron-ore reserves to Essar Steel.