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Essar Steel to mop up $2 billion via pre-export finance

02 Aug 2013 Evaluate

In a bid to trim its rupee-denominated debt, Essar Steel is planning to mop up $2 billion through pre-export finance. The company wants to free its balance sheet from fluctuation in currency rates and ensure annual savings of at least Rs 850 crore.

With this financing, the company would have dollarised three billion dollars of its debt which will lead to significant benefits. This will result in interest saving of approximately Rs 1,300-1,500 crore annually. The company had in June raised $1 billion through External Commercial Borrowing (ECB) resulting in an annual saving of Rs 450 crore. Essar Steel reportedly has $4 billion debt on its books.

Essar Steel is a fully integrated flat carbon steel manufacturer from iron ore to ready-to-market products. Its products find wide acceptance in highly discerning consumer sectors, such as automotive, white goods, construction, engineering and shipbuilding.

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