Power Of IBC? Essar Global Clears Entire Outstanding Debt Of Rs 12,000 Crore To Indian, Foreign Lenders

Essar Global Fund Limited (EGFL) has repaid all of its outstanding debt of Rs 12,000 crore which the company owed to a consortium of Indian and foreign lenders, reports Economic Times (ET). This last repayment has helped the Essar Group pare down almost 80 per cent of its Group debt.

“Over the past two years we committed ourselves to a massive deleveraging programme and have repaid more than Rs 1,37,000 crore to our lenders, most of which will go to the Indian bankers and lenders,” said Prashant Ruia, director of Essar Capital in a statement.

The massive reduction in debt has been partly due to the sale of Essar Oil to Russian oil-major Rosneft and Trafigura Group Pte Ltd. The deal worth Rs 86,000 crore was approved by a group 23 lenders led by State Bank of India (SBI) in 2017. It should be noted this deal helped Essar clear only a part of its debt.

Insolvency Woes

Essar Steel is still undergoing insolvency at the National Company Law Tribunal (NCLT). The Committee of Creditors (CoC) formed to oversee the resolution process had earlier declared ArcelorMittal, a global steel giant, as the highest winner.

Mittal’s bid was for only $5.7 billion but Essar Steel owed around $7.9 billion to lenders. Later, Essar Group, in surprise offer, agreed to repay $7.4 billion to the creditors.

The matter is still pending in court.

Also Read: How Insolvency And Bankruptcy Reforms Are Helping Clean Up The NPA Mess