Essar Steel stake sale hits a snag, key bidders back out: Srcs

Essar Steel's stake sale plan is likely to have hit a roadblock with Tata Steel, Liberty House and JSW Steel possibly having backed out after initial talks, reports CNBC-TV18.

Essar Steel, part of Essar Group controlled by billionaire brothers Shashi and Ravi Ruia, is under debt of nearly Rs 40,000 crore following a recent slump in commodity prices, weak demand and lower capacity usage at its units. Currently, capacity utilisation is around 70 percent.

Tata Steel, Liberty House and JSW Steel are believed to have begun talks with Essar's lenders in May to restructure debt, consider fresh fund infusion and an increase in the moratorium period.

ICICI Bank, State Bank of India (SBI), Punjab National Bank (PNB), IDBI Bank and Axis Bank are bankers to the stake sale process.