The Economic Times
Stock Analysis, IPO, Mutual Funds, Bonds & More

Essar Group shifts key functions to Bandra Kurla Complex to cut costs

Essar Group has shifted its major business functions to a newlyacquired , 4-lakh square feet office near Bandra Kurla Complex in an effort to cut costs.

Updated: Aug 02, 2012, 08.35 AM IST
MUMBAI: Essar House, the headquarters of the $27-billion Essar Group and the place from where the Ruias fought many a bruising battle, will no longer be the hub of group operations.

The steel-to-oil group has shifted its major business functions to a newlyacquired , 4-lakh square feet office near Bandra Kurla Complex (BKC) in an effort to cut costs.

The family managed group, started by brothers Shashi and Ravi Ruia as a construction firm in 1969, has already moved its top CEOs to the new place where two commercial towers have been built adjacent to the Bandra-Kurla complex — the city’s latest up market address for corporate offices.

"The new complex will serve as a colocation for our businesses, which will benefit from efficient decision making as the CEOs and their teams will be in one location instead of working from varied offices," said group president (HR) Adil Malia. The existing headquarters at Mahalaxmi will now serve as only an office for the promoters, the Ruias, and some senior directors and their teams.

Essar House, located just outside the Mahalakshmi race course, is an important landmark in central Mumbai with a commanding 360 degree view of the island city. When it was taken over by the Ruias and built in 1991, it signaled the emergence of a new conglomerate with big ambitions and one that was ready to take on challenges and promises of a recently liberalised economy.

Its glass wall façade and the helipad were unique to the island city, quickly becoming the talking point of the media and corporate cocktail circuits. Essar House had attracted attention when it opened immediately after the group faced financial problems, including a $250-million default on international loans.

"There were poojas performed to rectify the vastu problems," said a person familiar with the matter. More than 20 years later, the shift to the upcoming BKC signals the challenges confronting the group which has probably spread itself too thin with mega investments in steel, mining, iron ore, software in India and abroad.

The highly-leveraged group is looking to sell assets and raise money. Essar Energy, Essar Oil and Essar Steel have debt of $13 billion. The group plans to exit the telecommunications business and sell stakes in a US steel unit and a BPO .

Also Read

​Essar group appoints Kaustubh Sonalkar as president-HR and CEO of Essar Foundation

Essar Group pays more to former shareholders of Essar Oil

Essar Group, Tatas, ArcelorMittal eye Essar Steel

Essar Group says non-compete clause with Rosneft only for 3 years

Essar group president HR-Adil Malia resigns

Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service