Mumbai, May 12: Essar Oilís public debenture holders have approved a restructuring scheme at a meeting held on May 6.
Sources said four categories of debenture-holders attended the meeting. These were the holders of 2000 debentures and more, consisting mainly of banks, financial institutions and mutual funds. The second category comprised those with less than 2000 debentures. The scheme for this section provides for an exit option. The third category includes partly-paid debenture holders and the fourth group comprised debenture interest holders.
However, based on a request by financial institutions and other investors in view of the impending decision by the corporate debt restructuring (CDR) cell, the meeting of the first category of debenture holders was rescheduled to June 14. The other three categories of debenture holders passed the necessary resolution with the requisite majority both in value and number, sources added.
Sources said Essar Oil had started sending equipment and men to its site at Vadinar in a bid to physically restart work on the 10.5-million tonne refinery project. The company is in talks with vendors and suppliers associated with the project and is completing the documentation. Financial institutions want the refinery to be completed at the earliest. Essar Oilís proposal has been referred to the CDR.
ABB will provide deferred credit of $ 43 million and bridge funding of $ 48 million along with a completion guarantee. Essar Oil has completed 64 per cent of the work on the refinery and has already incurred a cost of Rs 6,300 crore till date. Essar Oil had raised around Rs 500 crore through the 14 per cent NCD issue in the mid-90s to fund its refinery project.
The company had appealed to the Gujarat High Court on March 31 to call meetings of holders of 14 per cent secured redeemable non convertible debentures of Rs 105 each to seek their approval, for implementing schemes of arrangement/compromise.
According to the scheme, the principal will be repaid in eight equal annual installments with a moratorium of four years after commissioning of the refinery.