Essar Steel Minnesota LLC Raises $450 Million in Bond Financing

HIBBING, MN, May 14, 2014 /PRNewswire/ - Essar Steel Minnesota LLC ("ESML") today announced that it has successfully closed a $450 million 6 year senior secured notes offering. The proceeds of the notes will be deposited into an escrow account, and upon the completion of certain conditions and documentation the proceeds of the notes will be released to ESML.

ESML is engaged in the development of a 7 million tonnes per annum ("mtpa") fully-integrated iron ore pellet production facility, with a total investment of $1.8 billion. The facility's location in the western Mesabi Range in northern Minnesota, which has a long history of iron ore mining, will allow ESML to leverage the established local infrastructure to complete and operate the facility. ESML has full transportation infrastructure in place and has entered into long-term off-take agreements that, upon commencement, will cover all of the expected production capacity. Based on its NI 43-101 report, ESML has an aggregate of approximately 1.8 billion tonnes of measured and indicated magnetite iron resources and expects to be one of the lowest cost producers of iron ore pellets in North America.

Essar Global Fund Limited ("EGFL"), the ultimate shareholder of ESML, also owns assets with 14 mtpa of existing iron ore pellet producing capacity and a further 6 mtpa of capacity under development. Combined with the 7 mtpa of capacity being developed in Minnesota, when fully on stream EGFL's portfolio companies will operate a total 27 mtpa of iron ore pellet capacity, one of the largest pellet production capacities globally.

Madhu Vuppuluri, ESML's President and CEO, commented:

"We are delighted to have completed this important financing, which marks a significant milestone for ESML as we move ahead to deliver our 7 million tonnes of pellet production capacity in Minnesota. ESML will be the first new pellet plant constructed in over 35 years in the Mesabi Range, made possible by not only the superior resource base and infrastructure available to ESML, but also the skill base and support of the local community."

About Essar Steel Minnesota LLC

Essar Steel Minnesota LLC ("ESML") is an iron ore producer engaged in the development of a 7 mtpa fully-integrated pellet production facility in the western Mesabi Range in northern Minnesota. When completed, the $1.8 billion Project will consist of an open-pit iron ore mine, crushing, concentrating and pelletizing facilities and a rail line and train-loading system.  ESML has an aggregate of approximately 1.8 billion tonnes of measured and indicated magnetite iron resources, of which approximately 1.7 billion tonnes are classified as proven or probable reserves, and an additional 0.2 billion tonnes of inferred magnetite iron resources. These estimates are based on ESML's NI 43-101 report.

For further information on Essar Steel Minnesota, please visit www.essarsteelmn.com

About Essar Global Fund Limited

Essar Global Fund Limited ("EGFL") is an investment fund managed by its exclusive investment manager, Essar Capital Limited ("ECL"). EGFL is a global investor, with majority or total ownership in a number of world-class assets diversified across the core sectors of Energy (comprising refining, power generation and exploration and production), Metals & Mining (comprising iron ore and coal mining, pellet making, steel manufacturing and steel retailing), Infrastructure (comprising ports and EPC businesses) and Services (primarily comprising shipping and BPO businesses).

EGFL's portfolio companies employ over 70,000 people across 30 countries, and have adopted international standards of health, safety, environmental protection and corporate governance.

The notes have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws and may not be offered or sold in the United States absent registration under such laws or applicable exemptions from such registration requirements.

This press release is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy the notes described in this press release, nor shall there be any sale of the notes in any state or jurisdiction in which such an offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

The information made available in this news release contains forward-looking statements, within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995.  Such statements reflect ESML's current view of future events, results of operations, cash flows, performance, business prospects and opportunities. Wherever used, the words "anticipate," "believe," "expect," "intend," "plan," "project," "will continue," "will likely result," "may," and similar expressions identify forward-looking statements as such term is defined in the Securities Exchange Act of 1934, as amended.  Any such forward-looking statements are subject to risks and uncertainties and ESML's actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities could differ materially from historical results or from the results expressed in these forward-looking statements.  Forward-looking statements contained herein speak only as of the date made and ESML undertakes no obligation to update or publicly announce the revision of any of the forward-looking statements contained herein to reflect new information, future events, developments or changed circumstances or for any other reason.

SOURCE Essar Steel Minnesota LLC



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