Court order freezes steel trader Stemcor's Indian assets sale
LONDON/NEW DELHI, Sept 25
LONDON/NEW DELHI, Sept 25 (Reuters) - An Indian court on Wednesday issued a restraining order which prevents indebted steel trading house Stemcor from selling its Indian iron assets, a sale that would help the trader to repay at least part of its $1.2 billion debt to banks.
The High court of Calcutta imposed a temporary restraining order on the sale of Stemcor's Indian assets, which include an iron ore mine and iron processing facilities in the state of Odisha, valued by an industry source at about $700-750 million.
The court did so prompted by a petition filed by ICICI Bank Ltd, India's second largest lender by assets, which has lent Stemcor 5.87 billion rupees ($93.57 million), with Stemcor's Indian assets as a collateral.
The loan is to be repaid by December but the bank filed the complaint worried that a sale of Stemcor's assets in India could jeopardise the payback.
"This action was taken without any notification to the company. We were made aware of that last Friday evening and Stemcor has every intention to comply with its contractual obligation," a spokesman for Stemcor said.
"We believe the matter will be resolved quickly."
ICICI was not immediately available to comment.
The next hearing will be on Oct. 7.
Stemcor, the world's largest independent steel trader, has come under pressure from lenders to sell some assets to raise cash, since it failed to refinance a $850 million syndicated loan that was due to mature in May.
Steelmakers including Jindal Steel and Power and JSW Steel have expressed interest in buying the Indian assets.
Stemcor, which trades between 15 million and 20 million tonnes a year of steel and steel raw materials, including coal and iron ore, posted a 5.1 billion pounds ($8.19 billion)turnover last year.
($1 = 0.6224 British pounds) (Editing by William Hardy)