Es­sar Steel Min­nesota hires debt re­struc­tur­ing ad­vis­ers

The Pak Banker - - COMPANIES/BOSS -

NEW YORK: Es­sar Steel Min­nesota LLC, a US af­fil­i­ate of In­dia's ship­ping, nat­u­ral re­sources and power con­glom­er­ate Es­sar Global Group, has hired fi­nan­cial and le­gal ad­vis­ers to help it re­struc­ture its debt, ac­cord­ing to peo­ple familiar with the mat­ter. The com­pany is in the fi­nal stages of build­ing a $1.8 bil­lion iron ore pel­let plant in north­ern Min­nesota. Its woes un­der­score the im­pact that cheap Chi­nese im­ports have had on the price of iron ore and US steel man­u­fac­tur­ers.

Es­sar Steel Min­nesota has hired in­vest­ment bank Guggen­heim Part­ners LLC and law firm White & Case LLP as debt re­struc­tur­ing ad­vis­ers, the peo­ple said this week. Es­sar Steel Min­nesota has about $1 bil­lion in debt, one of the peo­ple added. The sources asked not to be iden­ti­fied be­cause the ap­point­ments are not pub­lic. Spokes­peo­ple for Es­sar Steel Min­nesota, Es­sar Global, Guggen­heim and White & Case did not re­spond to re­quests for com­ment. Es­sar Steel Min­nesota's move to re­struc­ture its debt comes less than six months af­ter the bank­ruptcy fil­ing of its Cana­dian sis­ter com­pany, steel man­u­fac­turer Es­sar Steel Al­goma Inc. Es­sar Steel Al­goma also filed for bank­ruptcy in 2014.

Es­sar Global moved into Min­nesota in 2007, shortly af­ter it ac­quired the Al­goma man­u­fac­turer. At the time, the com­pany said it was po­si­tion­ing it­self to be close to high-value steel mar­kets and sources of iron ore. The plant, whose con­struc­tion started in 2010, is sched­uled to open this year, ac­cord­ing to the com­pany's web­site. It will per­ma­nently em­ploy 350 peo­ple once it opens, ac­cord­ing to the state.

Last year, Es­sar Steel Min­nesota failed to make timely pay­ments to its ven­dors, ac­cord­ing to press state­ments from the of­fice of the Min­nesota gover­nor. The com­pany did not live up to the terms of the orig­i­nal agree­ment it had with the state, and at the end of last year it ac­cepted a plan to re­pay Min­nesota's $66 mil­lion loan.

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