Essar Steel raises Rs 2,600 crore debt for Odisha project

Essar Steel has raised about Rs 2,600 crore in loan for its new project at Odisha that will integrate its steelmaking process and reduce steel production cost by about 42%.

The Ruias-controlled Essar Steel has built a pellet plant - a facility that converts ore fines into high grade usable lumps - in Odisha and a slurry pipeline to bring the ore to the port for shipping them to its steelmaking plant on the western coast, at a total project cost of Rs 4,200 crore.

This is part of the Rs 37,500 crore that company is spending to raise the steel capacity to 10 million tonnes,

The cost of borrowing is in the range of 11.5-12% and was closed a year back. There have been no new covenants for the loan that we raised and lenders are satisfied with the asset that company is creating.

Essar Steel's term loan currently totals Rs 20,000 crore.