A worldwide debt settlement has again positioned Essar as a key player in the future of an iron ore mine near Nashwauk.
Bloomberg reported Monday that Essar Global has settled with lenders for the debt of Essar Steel Minnesota. Further, Bloomberg said Essar Global has purchased $260 million (face value) in notes issued by Mesabi Metallics Inc, which substantially constitute all of the debt of Mesabi.
Lenders involved in the Essar Steel Minnesota project included ICICI Bank, State Bank of India Ltd., and a consortium of international funds led by Davidson Kempner, according to the web site Moneycontrol.com.
After Essar Steel Minnesota declared Chapter 11 bankruptcy in July 2016, a new company called Mesabi Metallics emerged with a reorganization plan. It was led by Matthew Stock, who said Essar would not be involved in the reorganized company. At the time, then-Gov. Mark Dayton objected to giving Mesabi Metallics possession of the state’s mineral rights. Eventually, a bankruptcy court judge selected a consortium managed by Chippewa Capital Partners to take Essar Steel Minnesota out of bankruptcy.
The situation grew even more convoluted last August, when Chippewa CEO and investor Tom Clark was forced out of the company by its board of directors.
In September, Mesabi claimed it had obtained financing from aglobal energy and commodities company called Mercuria. That deal was supposed to close in the fourth quarter of 2018, but no further announcements were made.