LONDON Jan 13 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
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
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
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.