In order to prevent Essar Steel from approaching
the corporate debt restructuring (CDR) cell, lenders to the company may provide a further loan of Rs 6,000 crore. The company may borrow this amount at an interest rate of 12.50 percent, reports indicate.
The Ruia-group firm would use around Rs 2,000-2,500 crore of the Rs 6,000 crore to repay group companies from whom it borrowed to pay banks.
Essar Steel may receive the additional loan from a consortium of 15 lenders led by State Bank of India (SBI).
Lenders don’t want Essar Steel to approach CDR because restructuring the company’s debt would reduce the interest income of banks.
A restructuring allows the borrower to revive the business since he gets more lenient repayment terms.
In 2012-13, Essar Steel posted a revenue of Rs 22,000 crore and this is expected to rise to Rs 33,000 crore in 2014-15.
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