Essar Shipping and Logistics Limited (ESLL) has raised USD 200 million in international banking markets. The proceeds of this facility will be utilized for financing its USD 300 million ship acquisition programme.

This 10 year facility was fully underwritten by De Nationale Investeringsbank N.V. Inc( NIBC) at a pricing of LIBOR plus 120bps. A consortium of international Banks including Den Norske Bank, Norway, Nordea Bank, Deutsche Verkehrs Bank AG and Bank of Scotland participated in the facility.

ESLL, which has an asset base of USD 1.5 billion, is part of Essar Global Limited. ESLL has three subsidiaries viz. Essar Shipping Limited, a leading sea transportation company, with a special focus on transportation solutions for the global Oil & Refining majors, Steel Industry and Thermal Power generating companies, Essar Logistics Ltd (ELL) which is involved in the business of supply chain logistics management and transshipment and Vadinar Oil Terminal Ltd which focuses on ports and terminals.

Reorganisation of shipping and logistics businesses

EGL had earlier announced the reorganization of its businesses in shipping, terminalling and logistics. In order to provide a sharper focus to its business and increase shareholder value, the Company has formed a fully owned subsidiary, Essar Shipping and Logistics Limited (ESLL), registered in Cyprus.

As per the re-organization plan of the shipping business, ESLL will have three operating companies under its umbrella:

1. Essar Shipping Ltd. (ESL) - 77% owned by ESLL, Essar Shipping is a leading sea transportation company, with a special focus on transportation solutions for the global energy business. A strong management team of experienced marine professionals steers the company, maintaining intense customer focus, world class operations, an impressive safety record and consistent financial performance. The Company owns a modern fleet of 26 vessels, including VLCCS, tankers and bulk carriers. The Company has long standing relationships with major global and Indian oil companies like Shell, Exxon Mobil, Chevron BP Aramco, Texaco, Bharat Petroleum and Indian Oil Corporation. The Company is ISO 9000:2000 and ISO 140001 certified and has been recognized as the "Safest Indian Shipping Company" by DG Shipping, India in 2004.

2. Essar Logistics Ltd (ELL) - fully owned subsidiary of ESLL will carry out the business of logistics management, transshipment and port services. The Company specialises in the handling, storage distribution and movement of cargo by sea, road and rail.

3. Vadinar Oil Terminal Ltd (VOTL) - Fully owned subsidiary of ESLL will focus on ports and terminals. VOTL has set up a 32 million tonne terminal facility in Vadinar, Gujarat, India, which will be operational by the end of September,2006. Vadinar port is an all weather, deep draft port, and will serve major oil refineries and traders in the region.

The reorganization will make ESLL a leading integrated logistics provider for steel mills, oil refineries and thermal power generation companies across the world.

About the Essar Group

The Essar Group is one of India's largest corporate houses, with interests spanning the core and infrastructure sectors of industry - steel, oil & gas, power, telecom & BPO, shipping and construction. It has an asset base in excess of US $ 6 billion (Rs. 27,000 crore) and employs over 15,000 people.