India Banks File Suit Against Essar Group

The former parent company of Essar Steel Minnesota, Mumbai, India-based Essar Group, is being sued by a group of banks in India for delays and cost overruns.

On Wednesday the Economic Times reported that lenders, lead by ICICI Bank of India, filed the suit in the New York state court system seeking $560 million in damages, claiming Essar Group allowed massive cost overruns in the Nashwauk project and failed to make scheduled loan interest payments starting in October, 2015.

The Forum News Service reports that the lenders invoked corporate guarantees by Essar’s offshore holding company.

SPL Advisors, who is a new investor, is attempting to broker a debt settlement then acquire the Nashwauk property and restart construction, hoping to have the project finished within the next two years.

The project is expected to employ around 350 people and producing 7 million tons of taconite iron ore pellets annually.