LONDON, Feb 26 (Reuters) - Stemcor won approval for a debt restructuring from the High Court in London on Wednesday, UK-based steel trader said in a statement, ending months of uncertainty after it defaulted on an $850 million loan last year.
The privately owned firm, controlled by members of the Oppenheimer family including opposition Labour lawmaker Margaret Hodge, also won approval from the court to borrow an extra $1.15 billion up to December 2015.
Stemcor’s lenders include ABN AMRO, HSBC, ING, Natixis and Societe Generale.
Like many steel firms, Stemcor was hit hard by the global financial crisis, and remains under pressure to sell its iron ore assets in India <here; in order to repay its more than $1 billion debts.
“Over the course of the next two years, Stemcor will continue to dispose of non-core activities. This will include the sale of its Indian assets where discussions with a number of interested parties are ongoing,” Stemcor spokesman Charles Armitstead said.
A company executive told Reuters last week that Stemcor’s iron ore pellet plant in Odisha, India, was running at 50 percent capacity due to weak domestic demand and to a recently introduced 5 percent duty on iron exports from India.
The export tax is weighing on the sale of Stemcor’s Indian assets, as is a report on illegal mining by the government-appointed Shah Commission, which has introduced some doubt about the future of mining in India’s top iron producing state.
At least two Indian firms - Jindal Steel and Power Ltd and JSW Steel Ltd - have confirmed they have bid for the assets, which include iron ore mines and a 4-million-tonne a year pellet plant in the eastern Odisha state, previously valued by an industry source at about $700-$750 million. (Reporting by Maytaal Angel; Editing by Louise Ireland)