Ruias plough back cash into energy, steel
The exit by the Ruias from its joint venture with Vodafone indicates the group’s renewed focus on its core businesses that includes steel and energy (coal, power, oil and gas) in India and abroad.business Updated: Mar 31, 2011 22:19 IST
The exit by the Ruias from its joint venture with Vodafone indicates the group’s renewed focus on its core businesses that includes steel and energy (coal, power, oil and gas) in India and abroad.
The last few years have seen Essar going on a buying spree. Some of these include acquisition of coal mines in Indonesia and the US ( both in 2010), takeover of iron ore facility and plans to set up an integrated steel facility at Minesota, North America (2008), acquiring the steel plant in Zimbabve (2011) and the acusition of Royal Dutch Shell’s refinery in UK (2011).
Informed sources told Hindustan Times that the $5 billion cash that Essar will receive after exiting the JV will be used to repay the $3.6 billion loan that the Ruia’s had raised in 2007-08 by pledging its 22% share in the joint venture with Vodafone.
The remaining fund corpus of $1.4 billion, sources said, will be used for expanding its global presence as also in executing its domestic power plans.
The group’s global arm — the London listed Essar Energy Plc, which raised $1.8 billion a year back through an IPO, is already sitting with a cash kitty of around $800 million to $1 billion.