Essar Global has completed the largest deleveraging programme in the history of India by repaying Rs 1.37 lakh crore debt.
The company has said that it has repaid its last tranche of debt amounting to Rs 12,000 crore to various Indian and foreign lenders. This is over and above Rs 30,000 crore repayment made to lenders in 2017 from the proceeds of the Essar Oil monetisation, the company said in a statement.
Over the past two years, Essar Group has repaid more than Rs 1,37,000 crore ($21 billion) of debt (including Essar Steel), a majority of which is to the Indian banking system. This is more than 80% of its group debt.
The company claims to have now repaid approximately Rs 6,300 crore to ICICI Bank, Axis Bank, and Standard Chartered Bank. With this, these banks have been repaid their entire credit facility of Rs 31,500 crore, which they had provided to Essar Global to fund its capital expenditure programme in 2008-14.
In 2017, through the sale of Essar Oil to a consortium led by Rosneft and Trafigura, Essar Global had repaid approximately Rs 86,000 crore of group liabilities, including Rs 72,600 crore to banks.
The company has additional asset sales concluded during the past two years, which include the sale of Aegis to Teleperformance and CSP for approximately Rs 6,000 crore ($910 million), and the sale of Equinox Business Parks to Brookfield Asset Management for Rs 2,400 crore ($360 million). The proceeds from these sales have also been utilised to further deleverage the group, the company said.
A further Rs 45,000 crore of group's debt relating to Essar Steel India is being addressed through the ongoing IBC process. In this regard, lenders have already received an offer from ArcelorMittal offering them cash repayment of Rs 42,000 crore, which is yet to see the full approval.
Also, a subsidiary of Essar Global has separately offered Rs 54,389 crore, which provides full repayment to the secured lenders as well as the operational creditors.
Other than this, Essar has also paid Rs 3,955 crore to minority shareholders of Essar Oil, and Rs 1,400 crore to minority shareholders of Essar Ports.
Meanwhile, the company blamed government policies for the financial issues it has been facing of late.
"Adverse regulatory and governmental actions—including cancellation of natural gas supply by the Government of India, and of coal mine allocations between 2010 and 2015, which were both unanticipated and outside of Essar’s control—affected some of Essar’s businesses," said Prashant Ruia, Director-Essar Capital.