LONDON, Jan 13 (Reuters) - Lenders to Stemcor, formerly theworld's largest steel trader, have extended its debt standstillagreement to the end of February, allowing it more time torestructure a $1.25 billion debt, a company spokesman said.
The private British firm, controlled by members of theOppenheimer family - which includes opposition Labour Partylawmaker Margaret Hodge - is under pressure to sell its iron oreassets in India in order to repay its debt.
The assets, which include an iron ore mine and processingfacilities in Odisha state, have been valued by an industrysource at $700-750 million, though that number is subject tochange if the state beefs up its mining laws.
Output from Odisha - the largest iron ore-producing state -could be affected after a government-appointed panel, the ShahCommission, submitted a report highlighting illegalities inmining.
India's iron ore exports are down by about 85 percent or 100million tonnes over the past two years as the government imposedexport bans in Karnataka and Goa in an attempt to clamp down onillegal mining.
Also a potential headwind for Stemcor are tense negotiationswith India's ICICI Bank Ltd, which last year convincedan Indian court to temporarily prevent Stemcor from selling itsIndian assets.
India's second largest lender by assets has lent Stemcor5.87 billion rupees ($93.57 million), with Stemcor's Indianassets as a collateral, and is worried that a sale couldjeopardise a payback.
Like many steel companies, Stemcor was hit hard by theglobal financial crisis. The company failed to refinance an $850million syndicated loan that was due to mature last May, and hassince concluded four standstills.
Under a standstill, lenders agree not to ask for repaymentand work with the company to restructure the debt. Lenders toStemcor include ABN AMRO Bank, HSBC, ING,Natixis and Societe Generale.
HSBC Holdings (HSBA)
