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In an interesting development, Odisha Slurry Pipeline Infrastructure (OSPI), which was recently acquired by NuMetal Mauritius, has agreed to repay its entire debt of about ₹2,000 crore.
In response to a loan-recall notice issued by Canara Bank on February 15, OSPI has said in a letter that the company has received an in-principle commitment for refinancing its entire debt, and expects to repay all its dues to banks and other lenders before April 30.
It has asked Canara Bank to confirm the amount which would be due as of April 30 and release all security interest over the company’s asset upon receipt of full and final payment, the firm said in the letter reviewed by BusinessLine .
NuMetal Mauritius is a consortium promoted by Russia’s VTB Bank and a group of investors including Rewant Ruia, who is the son of Essar Steel promoter Ravi Ruia.
OSPI, which was once a subsidiary of Essar Steel, operates a 253-km pipeline supplying iron ore from mines deep in the hinterland to Essar’s pellets plant in Paradip, Odisha. The country’s largest slurry pipeline is crucial to bring down the cost of production at Essar Steel.
Agreement with Srei
In February, NuMetal signed a binding agreement with Srei Infrastructure to acquire 70 per cent stake in OSPI even as it is engaged in a pitched battle with ArcelorMittal to acquire the debt-laden Essar Steel in National Company Law Tribunal-driven process.
NuMetal has claimed that its acquisition of OSPI will not impact Essar Steel’s operations as the latter owns the remaining 30 per cent stake in OSPI besides a binding agreement to service Essar Steel’s interest.
Court cases
However, the Delhi High Court has stayed the deal till April 5, following a petition filed by lenders on the grounds that their consent was not sought.
Interestingly, in 2015, banks had filed a case against Essar Steel for off-loading 70 per cent stake to Srei Infrastructure without their approval. They now claim that Srei does not have any right to sell it to a third party as it is not the real owner of the pipeline.
Earlier this month, IDBI Bank initiated bankruptcy proceedings against OSPI in the Kolkata Bench of NCLT to recover ₹1,670 crore collectively on behalf of lenders. However, the tribunal not yet admitted the case.
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