Mumbai, Nov 24 (IANS): Essar Steel Monday said that it has raised $1 billion through long-term export securitisation which it will use to pre-pay existing rupee debt under its strategy to dollarize its balance sheet.

"Bringing down interest cost and elongating maturity of our debt is a critical component of our strategy to enhance our competitiveness," said Mahadev Iyer, chief financial officer and director (finance), Essar Steel India.

"We are uniquely positioned to securititse exports owing to our excellent track record in exports and excellent export potential."

The company had earlier raised $1 billion through external commercial borrowing (ECB) route.

According to the integrated steel producers, the latest move will help Essar Steel de-risk its balance sheet as its revenues are dollar linked and provides a natural hedge for dollar-denominated debt.

With the latest financing, the company has dollarised $2 billion of its debt which has led to significant benefits.

One of the benefits the company pointed was the reduction in the average interest cost from rupee linked rate to dollar linked rate which has resulted in a large interest saving of Rs.720 crore annually and elongation of the average maturity of its debt from 3.5 to 6.75 years.

Essar Steel India is one of India's leading integrated steel producers with an annual production capacity of 10 million tonnes.

The company has invested Rs.37,000 crore for setting up of a 10 million steel plant in Hazira, Gujarat.

The completion of its Odisha facility has made Essar Steel one of the lowest cost integrated steel facility in the country.