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Essar Global repays Rs 12,000 cr debt to Indian, foreign banks

1/7/2019

Mumbai/New Delhi, Essar Global Fund Ltd, the holding company of the Essar Group of companies, on Monday claimed that they have repaid the last tranche of debt of Rs 12,000 crore to its various Indian and foreign lenders. Besides, the company has also made a settlement with all lenders who had provided debt facilities to erstwhile Essar Steel Minnesota Ltd and were beneficiaries of unsecured guarantees from Essar Global. Essar Capital Director Prashant Ruia said here that the company’s 12,000 crore debt was in addition to the Rs 30,000 crore repayment made in August 2017 to various lenders from the proceeds of the Essar Oil monetisation. Over the past two years, Essar Group has repaid more than Rs 1,37,000 crore of debt, including Essar Steel, majority of which is to the Indian banking system. This is more than 80 per cent of its group debt. Essar Global has now repaid approximately Rs 6,300 crore to ICICI Bank, Axis Bank and Standard Chartered Bank. With this, these banks have been repaid their entire facility of Rs 31,500 crore, which they had provided to Essar Global to fund its capital expenditure programme in 2008-14. The only continuing lender to Essar Global is now VTB, which has been working with Essar Global over the past three years to monetise certain assets, strategically lighten the balance sheet, deleverage the group and reposition it for growth in the future. In addition to repaying all of its existing secured debt, Essar Global has also simultaneously concluded a settlement with all lenders who had provided debt facilities to erstwhile Essar Steel Minnesota Ltd and were beneficiaries of unsecured guarantees from Essar Global. Lenders with whom settlements have been concluded include various Indian banks led by ICICI Bank, State Bank of India, as well as a consortium of international funds led by Davidson Kempner. As part of the aforementioned settlement, Essar Global has purchased 260 million dollars face value notes issued by Mesabi Metallics Inc. These notes substantially constitute all of the debt of Mesabi, and pave the way for Essar Global to once again participate in the low-cost iron ore mining and pellet manufacturing project that is under construction in Minnesota, US.

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