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The Industrial development Bank of India (IDBI) did not discuss on Thursday the issue of financial institutions (FIs) financing the redemption of Essar Steel's $250 million floating rate notes (FRN), due for redemption on July 13.

IDBI executive director T M Nagarajan said the issue was not on the agenda for Thursday's executive committee meeting.

Nagarajan said reports of the FIs agreeing to bail out Essar Steel was wrong. "The company should arrange for a rollover," he said.

IDBI sources said the FIs have sounded out Essar Steel on the possibility of a rollover. "We have made our stand clear. Essar will have to complete its proposed divestment process before any request for additional financial assistance can be considered," the sources said.

 

"Though they are making substantial progress, it may not be possible to complete the divestment by July 13," the sources said explaining why the institutions have asked Essar to consider a rollover.