Essar Shipping | The share price has risen 62 percent in the last three trading sessions. On August 12, the stock closed at Rs 11.64 against a close of Rs 7.19 on August 7, 2020.
Essar Global Fund, the holding company of the Ruias-held Group, on January 7 repaid Rs 12,000 crore to its lenders, including ICICI Bank, Axis Bank and Standard Chartered Bank.
"Over the past two years, Essar Group has repaid more than Rs 137,000 crore (US$21 billion) of debt (including Essar Steel), a majority of which is to the Indian banking system. This is more than 80 percent of its group debt," the company said in a statement.
Sources told Moneycontrol the group debt is at about Rs 35,000 crore after the latest repayment.
Essar Global 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 statement said.
Russia's VTB is the only continuing lender to Essar Global.
The latest deleveraging happens after a major round in 2017, in which Essar Global paid back Rs 86,000 crore of liabilities after the sale of Essar Oil to a consortium led by Rosneft.
The Group later also sold its business outsourcing business, Aegis, for Rs 6,000 crore, and Equinox Business Parks to Brookfield Asset Management for Rs 2,400 crore.
Essar's steel business, which has a debt of Rs 45,000 crore, is now in the insolvency courts. While ArcelorMittal has made a bid of Rs 42,000 crore, the Ruias have submitted a proposal of Rs 54,389 crore.
The Essar Group at present has annual revenues of $11.5 billion, with a presence in sectors such as energy, infrastructure and metals & mining.
A comeback in Minnesota?
The holding company also announced it had come to 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."
The lenders include ICICI Bank and State Bank of India.
Essar Global had acquired Minnesota Steel in 2007, giving it access to rich iron ore reserves. But a commodity slowdown and delay in projects led Essar Steel Minnesota to file for bankruptcy in 2016. The firm was later taken out of bankruptcy by Mesabi Metallics in 2017. But there were several claims on the project.
In the latest move, Essar Global has purchased $260 million face value notes issued by Mesabi Metallics Inc. "These notes substantially constitute all of the debt of Mesabi, and paves 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, USA," the company said.
While a source confirmed Essar Global will be "soon back" in Minnesota, he declined to give more details.