The joint lenders forum has directed Essar Steel to speed up the process of issuing an information memorandum for attracting potential investment in the company.

Saddled with a debt of ₹40,000 crore, the company recently appointed SBI Capital Markets and ICICI Securities to find strategic investors in the company to reduce its debt.

This apart, the promoters have agreed to invest ₹1,500 crore in the company.

Earlier this week, Essar Steel was in discussion with the lenders to extend the tenure of ₹15,000 crore debt under the 5/25 scheme. Banks have already extended the same.

5/25 scheme The 5/25 scheme entails periodic refinancing, say every five years, and fixing a longer repayment schedule for long-term projects as part of flexible structuring

The company’s management appraised bankers of its efforts to improve its financials. Essar Steel’s efforts were supported by sharp fall in gas prices, cost reduction initiatives, a rebound in steel prices post the minimum import price and other measures initiated by the government.

Incidentally, the Indian Steel Alliance representing the steel companies has approached the government for a special financial package in line with the one extended to sugar and textile sectors.

In the last three years, Essar Steel’s performance suffered due to several factors including government's cancellation of committed natural gas allocations, which forms the main feedstock for steel making.

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