FIs to evergreen ESL account

MUMBAI, APR 24: As part of a strategy to keep Essar Oil out of the NPA non-performing asset list, financial institutions are meeting on Tuesday to consider a proposal of Rs 28.5 crore additional funding for the company. This funding will enable the company service the overdue interest payments, sources said.

Senior executives from FIs will consider a plan whereby ICICI will extend an additional Rs 9.5 crore, IDBI Rs 9 crore, IFCI Rs 3.5 crore, LIC Rs 3 crore, UTI Rs 2 crore and GIC Rs 1.5 crore. FIs want the company to service the outstanding loan 8211; evergreening the account 8211; and prevent it from becoming a sticky asset.

Essar Oil is negotiating with potential suitors for off loading part of the promoters stake in a bid to get the project going. The project has already run into time and cost overruns.

The Ruias and their associates along with the Chandarias hold 57 per cent stake in the company while 14 per cent is held by the financial institutions and mutual funds and the rest with the public. The promoters have already pumped in over Rs 4,750 crore on the 10.5 million tonne refinery and achieved two-third completion of the project.