Usha Martin fully committed to repay debt

The board and management of Usha Martin are fully committed to sale of its steel business to repay its debt, the company said in an official statement on Tuesday.

The concerns highlighted by Shri Basant Kumar Jhawar and Shri Prashant Jhawar regarding any diversion of funds received from Tata Steel (or its subsidiary) towards purchase consideration for purchase of steel division of UML is unfounded. We would like to clarify that UML will primarily use the entire consideration received as part of this sale (net of transaction cost and taxes) to discharge liabilities of our lenders. UML is committed to ensure that all sale proceeds are first applied to repayment of existing lenders, which will exhaust almost all of the sale proceeds. Post divestment repayment of existing lenders, UML will continue to have a significantly (if not fully) deleveraged wire rope business."

In June the company's board had given the go ahead to management to look for suitable buyers to dispose off the steel business as the debt of the company stood at Rs 4,650 crore, which included term loans, working capital borrowings, LC and bills discounted, the statement added.