SBI’s Rs700 crore Visa Steel loan up for auction

12 Jan 2023 , 11:49 AM

State Bank of India (SBI) has put its Rs700 crore loan to the sick Visa Steel on hold, seemingly frustrated by more than five years of litigation delays on the distressed account.

The bank has set a reserve price of Rs230 crore for an e-auction to be held on February 10, 2023.

SBI’s offer to sell this account comes as the Orissa High Court has stayed the initiation of the insolvency process against Visa for the second time after the Cuttack bench of the National Company Law Tribunal (NCLT) admitted the borrower for the commencement of bankruptcy proceedings, acting on a plea by Punjab National Bank late November.

In November, the NCLT’s Cuttack bench accepted a plea against Visa Steel, putting an end to more than four years of unsuccessful bank attempts to put the company into administration.

The second, and most recent, stay by the Orissa High Court came just one day before banks were set to form a committee of creditors to begin insolvency proceedings. The Orissa High Court granted Visa Steel a stay against an SBI insolvency petition filed against the company in 2018. 

Visa is a company based in Kolkata with plants in Kalinganagar, Odisha. The company had a special steel capacity of 500,000 tonnes. It also operated ferro chrome, power, coke, sponge iron, and pig iron units.

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