Lenders extend steel trader Stemcor's debt standstill to end-Feb
LONDON Jan 13 (Reuters) - Lenders to Stemcor, formerly the world's largest steel trader, have extended its debt standstill agreement to the end of February, allowing it more time to restructure a $1.25 billion debt, a company spokesman said.
The private British firm, controlled by members of the Oppenheimer family - which includes opposition Labour Party lawmaker Margaret Hodge - is under pressure to sell its iron ore assets in India in order to repay its debt.
The assets, which include an iron ore mine and processing facilities in Odisha state, have been valued by an industry source at $700-750 million, though that number is subject to change if the state beefs up its mining laws.
Output from Odisha - the largest iron ore-producing state - could be affected after a government-appointed panel, the Shah Commission, submitted a report highlighting illegalities in mining.
India's iron ore exports are down by about 85 percent or 100 million tonnes over the past two years as the government imposed export bans in Karnataka and Goa in an attempt to clamp down on illegal mining.
Also a potential headwind for Stemcor are tense negotiations with India's ICICI Bank Ltd, which last year convinced an Indian court to temporarily prevent Stemcor from selling its Indian assets.
India's second largest lender by assets has lent Stemcor 5.87 billion rupees ($93.57 million), with Stemcor's Indian assets as a collateral, and is worried that a sale could jeopardise a payback.
Like many steel companies, Stemcor was hit hard by the global financial crisis. The company failed to refinance an $850 million syndicated loan that was due to mature last May, and has since concluded four standstills.
Under a standstill, lenders agree not to ask for repayment and work with the company to restructure the debt. Lenders to Stemcor include ABN AMRO Bank, HSBC, ING, Natixis and Societe Generale.
- China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan |
- U.S. court rulings create new uncertainty over Obamacare
- Israel pounds Gaza despite international peace efforts |
- EU readies possible capital, tech sanctions on Russia
- Islamic State crushes and coerces on march towards Baghdad