Essar Steel India proposes $7.42 billion settlement to creditors

Steel rolls at an ArcelorMittal plant, the company that said last week it would pay off creditors of two Indian firms, in which it previously held stakes, to bid for Essar. (AFP)
Updated 25 October 2018
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Essar Steel India proposes $7.42 billion settlement to creditors

DELHI: Essar Steel India Ltd. said its board and shareholders have offered to pay 543.89 billion rupees ($7.42 billion) to creditors to settle their claims, allowing the company to exit from a bankruptcy process.
The steelmaker, owned by the billionaire Ruia brothers, is one of a group of companies that are among India’s biggest debt defaulters that were pushed into the bankruptcy court last year after a central bank order that was aimed at clearing record bad loans at the country’s banks.
Essar Steel’s plan consists of an upfront cash payment of 475.07 billion rupees to all creditors, including a 455.59 billion rupees to the senior secured financial creditors.
The company submitted a proposal to its creditor committee on Thursday for settlement of the entire claims of the financial creditors, operational creditors, workmen and employees of Essar Steel India.
The offer will lead to “full upfront recovery of loans for the lenders, and maximum recovery for all other classes of creditors,” the company said.
The world’s biggest steelmaker, ArcelorMittal SA, is forming a joint venture with Japan’s Nippon Steel & Sumitomo Metal Corp. to bid for the debt-ridden Essar Steel.
ArcelorMittal said last week that it would pay off creditors of two Indian firms, in which it previously held stakes, to bid for Essar.


Abu Dhabi aims to lure start-ups with investment in new technology hub

Updated 24 March 2019
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Abu Dhabi aims to lure start-ups with investment in new technology hub

  • The initiative will help Abu Dhabi reduce reliance on oil
  • Mubadala hopes to attract Chinese and Indian companies

ABU DHABI: Abu Dhabi will commit up to $272 million to support technology start-ups, it said on Sunday, in a dedicated hub as part of efforts to diversify its economy.

US tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub as the capital of the United Arab Emirates continues its push to reduce reliance on oil revenue.
Abu Dhabi derives about 50 percent of its real gross domestic product and about 90 percent of central government revenue from the hydrocarbon sector, according to ratings agency S&P.
The emirate launched a $13.6 billion stimulus fund, Ghadan 21, in September last year to accelerate economic growth. Ghadan means tomorrow in Arabic. The new initiative, named Hub 71, is linked to Ghadan will also involve the launch of a $136 million fund to invest in start-ups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
The goal is to have 100 companies over the next three to five years, Ajami said. “The market opportunities in this region are immense,” he added.
Mubadala, with assets of $225 billion and a big investor in tech companies, will act as the driver of the hub, located in the emirate’s financial district.
Softbank will be active in the hub and support the expansion of companies in which it has invested, Ajami said, adding that Mubadala is also aiming to attract Chinese and Indian companies, among others.
Mubadala which has committed $15 billion to the Softbank Vision Fund, plans to launch a $400 million fund to invest in leading European technology companies.
Incentives mapped out by the government include housing, office space and health insurance as part of the $272 million commitment, Ajami said.
Abu Dhabi will also announce a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.