Minnesota Gov. Mark Dayton gave Essar Steel Minnesota a week to agree to a terms of proposal to repay $66 million in loans.
Essar received the loans in 2004 in return for promises to build a $1.9 billion iron ore processing plant and steel mill in Nashwauk, Minn. The taconite plant is still under construction and the steel mill plan has been scrapped.
The new “final offer” from the state would require Essar Steel Minnesota to begin loan payments with $3.54 million due by Feb. 7, 2016 and $6.6 million by March 31. The balance of $55.9 million would be spread over 16 quarterly payments beginning March 31. In the event of a sale of the company, all debts would be due.
Essar says it is reviewing the proposal and “continuing to work diligently in its efforts to keep payments flowing to local contractors and vendors.” Essar owes more than $18 million to vendors for work already completed on the taconite plant that is expected to be completed in late 2016.
Essar Minnesota President Madhu Vuppuluri said the matter of repayment to the state “will be resolved soon, very soon.”
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