Bankers have invoked the strategic debt restructuring (SDR) package for beleaguered Visa Steel Ltd, the second alloy manufacturer to go through this route in as many months.
In a communication to the stock exchanges, the city-based company said the joint lenders' forum met yesterday and agreed on this course.
"The company is in discussion with lenders for preparing a conversion package to enable inviting a strategic investor in its special steel business," it said.
Visa, promoted by the family of Vishambhar Saran, is the second steel company after Electrosteel Steels to be restructured under the SDR route. The development comes at a time steel firms are facing weak demand and plunging prices, globally.
Under the SDR mechanism approved by the Reserve Bank through a circular dated June 8, the promoter and the lenders will have to come up with a restructuring plan within 90 days of the formation of the joint lenders forum. After this, they will have 18 months to execute the plan, which includes bringing in a new investor and restructuring the debt.
During this period, the lenders will continue to support the company and the loans will be treated as standard.
"We will bring in a new investor to the special steel business, which is in the process of being spun out to a new subsidiary. There are several global players in this business and initial discussion has begun," a Visa official said.
Visa Special Steel will have a 0.5-million-tonne plant, including a blast furnace, sponge iron unit, steel melt shop, refining facilities, wire and bar rod mill.
Source: The Calcutta Telegraph
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