Essar Steel India has announced that it has raised $1 billion through external commercial borrowing (ECB) in line with its strategy to de-risk its balance sheet.

The ECB was raised at a competitive London Inter-Bank Offered Rate (LIBOR)-linked pricing, the company said in a statement. The ECB was subscribed by a large group of banks led by IDBI and ICICI Bank, it said.

The company’s debt before the ECB was around Rs.22,500 crore. “The company’s earnings are dollar-linked or dollar-denominated, and this is an attempt to correct the anomaly,” a company spokesman told The Hindu adding, “The rupee debt was 12.5 per cent while the ECB is at an attractive 5.5-6.5 per cent per annum”. The company said that as a result of the dollarising of its rupee debt, it would save around Rs.450 crore per annum in interest.

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