Essar head office will try to help steel plant
3 November 2015
The Essar Group in India has come up with a plan to help its steel business, which includes Essar Steel Algoma here in Sault Ste. Marie, deal with a serious cash flow problem through selling off $2.2 billion (U.S.) in assets, reports Indian publication Business Standard.
The cash flow problem at Essar Steel Algoma stems from low demand for steel, low steel prices and cheaper, dumped steel imports from other countries.
Essar Steel Algoma's woes led to the layoff of 100 workers October 2.
Standard & Poor's Ratings Services lowered Essar Steel Algoma's long term corporate credit rating from 'CCC+ to 'CCC-' last month.
Worried bankers have asked the Ruia family, Essar's owners, to speed up their asset sale plan, according to a report in Business Standard.
All Indian steel companies, not only Essar Steel, are going through difficulties.
Steel Authority of India, Tata Steel, JSPL and JSW Steel are also suffering because of trouble with coal mines, falling steel prices and dumping of cheaper Chinese steel.
Essar Steel is the only company within the Essar group having a hard time, reports
The online Indian news source reported Essar Oil, Essar Port and Essar Services are in better financial shape and paying their debts off in time.