Bailout considered for nine steel companies in India

Bailout considered for nine steel companies in India

In consequence of finalisation of three major steel producers Essar Steel, Jindal Vijaynagar and Ispat Industries' restructuring package in February, the Indian government now has nine other steel projects to rescue from financial stress. The projects include Mid East, Bellary Steel, SJK Steel Corp., Remi Metals, Southern Iron and Steel, Malvika Steel, Kumar Iron and Steel, Neelchal Ispat and Jayaswal Neco. The co-ordination group led by the Indian Steel Minister and including officials from various ministries and industry representatives, has forwarded a proposal to lenders and related ministers, discussing the issues that effect these companies' financial situation, such as, the withdrawal of the facility to pay excise duty at the basic price level, the gas price rise and customs duty increases that results in rising costs of these steelmakers, for their responses. In short, the proposal asks the lenders to reduce interest rates on loans and restructure the debts of the aforementioned nine steel companies. Furthermore, government assistance in securing supplies of iron ore and coal and also completion of railway links have also been requested. In return, the companies are requested to pledge a part of their equity and also write-down their 40% equity.