Lenders okay Essar Oil's CDR package

Essar Oil's corporate debt restructuring (CDR) scheme, which includes partial mortgaging of Essar House has been approved by all the lenders.

The company has filed a petition in this regard in the Gujarat High court for the confirmation of the scheme the judgement of which will be given on 12 September. The National stock exchange has been duly informed of the development.

Under the scheme, Essar has offered a security package to the lenders for the loans, which includes the pledging of 20.91 per cent stake held by the promoters in Essar shipping, and partial mortgage of Essar House.

An Essar spokesperson said in an email response, "in any case, offering securities for borrowing purposes, is a normal business-practice, for such large projects." The spokesperson declined to comment on what "exactly was meant by partial mortgage of Essar House".

The company's 10.5 million tonne refinery project at Jamnagar has been a subject matter of corporate debt restructuring scheme.

Under the scheme, lenders have agreed to restructure all their existing debts, including debentures, and to provide fresh funds under certain conditions, one of which relates to the finalisation of a scheme suitable to all other large debenture-holders.