Ruias Face Another Setback As Essar Power Lenders Move To Invoke Guarantees

The Ruia family, mounting one legal battle after another to thwart Essar Steel Ltd.’s insolvency resolution, faces a fresh setback. Lenders to the Essar Group’s power companies have filed recovery cases to invoke personal guarantees provided by the promoters, two people aware of the development told BloombergQuint. Private lender ICICI Bank Ltd., and state-run IDBI Bank Ltd. moved various benches of the debt recovery tribunal, the people said without willing to be identified as they are not authorised to speak to the media. ICICI Bank Ltd. is fighting a case at the Delhi bench of the DRT, trying to recover personal guarantees offered against loans to Essar Power Mahan Ltd., which has set up a 1,200-megawatt capacity plant at Singrauli district, Madhya Pradesh. The loans, and consequently the guarantees, were to purchase and develop a coal mine which has since then been returned to the government pursuant to a Supreme Court order on allocation of coal mines. Read more