Mauritius-based investment vehicle will repay all the Rs 2,200-cr debt of OSPIL to buy the stake from SREI Infrastructure
New Delhi : Russia’s VTB Capital-backed NuMetal has agreed to buy 70 per cent stake in Odisha Slurry Pipeline Infrastructure (OSPIL) by repaying all of the about Rs 2,200-crore debt of the company, making the bidding battle for bankrupt Essar Steel murkier.
NuMetal, where Russia’s second largest bank VTB group is the majority shareholder, will buy the stake from SREI Infrastructure, sources privy to the development said.
OSPIL is the largest slurry pipeline in India and is strategic to Essar Steel plant in Paradip. The slurry pipeline transports iron ore from mines in Odisha for producing steel at the factory. The company has sought assurance from lenders that all rights on the assets will be transferred back to the company after the loans are repaid.
Mauritius-based investment vehicle, NuMetal is competing with ArcelorMittal, the world’s biggest steelmaker, to buy out Essar Steel in the bankruptcy auction currently on. The auctions being done under the new bankruptcy rules are to recover Rs 51,800 crore Essar Steel owes to lenders.
Sources said lenders of OSPIL had previously objected to sale of the asset on grounds that under the loan agreements, any sale required prior approval. They had also issued recall notices.
OSPIL has now told the group of dozen banks that it has now arranged funds to repay the entire debt, they said adding the company has written to the lenders offering to repayments latest by April 30. NuMetal is the source of funds for such repayment. The repayment would remove all hindrances for the purchase under of pipeline by NuMetal, giving it full control over the asset. OSPIL on Thursday wrote to all its 12-13 lenders, saying it has “received in-principle commitment for refinancing the entire indebtedness of the company”. It said it expects to be able to make repayment of all dues on or before April 30.
