Vedanta Resources PLC unit Vedanta Ltd. said June 4 that it executed an approved resolution plan for the acquisition of a 90% stake in debt-laden steelmaker Electrosteel Steels Ltd.
The company deposited an upfront 53.20 billion Indian rupees in escrow in connection with the transaction, which was recently approved by India's National Company Law Tribunal.
The remaining 10% stake in the firm will be held by existing shareholders and creditors.
After securing all the required approvals, Vedanta has taken control of Electrosteel and put a new board in place.
Electrosteel owns a steel manufacturing facility in India's Jharkhand state, with a capacity of 1.5 million tonnes per year and the potential to increase to 2.5 Mt/y.
Vedanta noted that the acquisition will complement its existing iron ore business as the vertical integration of steel manufacturing capabilities has the potential to generate significant efficiencies.
The company won a bid to acquire Electrosteel in March. Tata Steel Ltd., Renaissance Steel India Pvt. Ltd. and Edelweiss Alternative Asset Advisors Pte. Ltd. were the other suitors for the asset.
As of June 1, US$1 was equivalent to 66.97
