New Delhi, Mar 30 (PTI) Russia’s VTB Capital-backed NuMetal has agreed to buy 70 per cent stake in Odisha Slurry Pipeline Infrastructure Ltd (OSPIL) by repaying all of the about Rs 2,200 crore debt of the company.

NuMetal, where Russia’s second largest bank VTB group is the majority shareholder, will buy the stake from SREI Infrastructure Ltd, sources privy to the development said.

OSPIL is the largest slurry pipeline in India and is strategic to Essar Steel plant in Paradip. The slurry pipeline transports iron ore from mines in Odisha for producing steel at the steel factory.

Mauritius-based investment vehicle, NuMetal is competing with ArcelorMittal, the world’s biggest steelmaker, to buy out Essar Steel in the bankruptcy auction currently on. The auctions being done under the new bankruptcy rules are to recover Rs 51,800 crore Essar Steel owes to lenders.

Sources said lenders of OSPIL had previously objected to sale of the asset on grounds that under the loan agreements, any sale required prior approval. They had also issued recall notices.

OSPIL has now told the group of dozen banks that it has now arranged funds to repay the entire debt, they said adding the company has written to the lenders offering to repayments latest by April 30.

NuMetal is the source of funds for such repayment.

The repayment would remove all hindrances for the purchase under of pipeline by NuMetal, giving it full control over the asset.

OSPIL yesterday wrote to all its 12-13 lenders, saying it has “received in-principle commitment for refinancing the entire indebtedness of the company”.

It said it expects to be able to make repayment of all dues on or before April 30.

The company asked the lenders to confirm immediately the amount which would be due to them as of April 30, sources said.

It also asked the lenders to confirm that they would immediately release all security interest over the assets of the company once payments are made.

This is published unedited from the PTI feed.