The Ruia-promoted Indian conglomerate Essar Group has got close to Rs 200 crore (over $45 million) for withdrawing its bid for American steel firm Esmark and the payment is coming from succesful suitor Severstal of Russia.

Under the terms of merger agreement signed between Severstal and Esmark, which supercedes a previous agreement signed between Essar Steel [Get Quote] and the target company, the Russian firm has paid the Indian entity $25-million as termination fee for the previous deal.

Besides, Severstal has made another payment to Essar for termination of some loan facilities extended by the Indian bidder to Esmark under the previous deal structure. This payment includes a '$20.3 million payment in lieu of the exercise by Essar Steel of its conversion option under the Essar financial agreements.'

The first payment of $25 million includes an 'MOA Breakage Cost' of $24 million and some transaction related expenses. The MOA Breakage Cost is the fee paid to Essar in connection with the termination of the Memorandum of Agreement, signed by Essar and Esmark on April 30, 2008.

As per the latest deal between Esmark and Severstal, if the agreement is terminated in circumstances requiring payment of termination fee by the target company to the Russian firm, then Esmark would have to reimburse Severstal in cash an amount equal to the MOA Breakage Costs, or $24 million.

When contacted, an Essar spokesperson said this is the amount received by the company as break-up fee and exercise of warrants attached to the loan provided to Esmark that was assumed by Severstal.