World's largest steel trader

Lenders extend Stemcor debt standstill to end-Feb

Reuters reported that 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 USD 1.25 billion debt.

The private British firm, controlled by members of the Oppenheimer family which includes opposition Labour Party lawmaker Mr 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, have been valued by an industry source at USD 700 to 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% or 100 million tonne over the past 2 years as the government imposed export bans in Karnataka and Goa in an attempt to clamp down on illegal mining.

India's second largest lender by assets has lent Stemcor INR 5.87 billion, 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.

(www.steelguru.com)

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