This is part of the company's corporate debt restructuring programme
Kolkata-based steel maker, Visa Steel, has decided to sell 49% stake in Visa Coke (its 4 lakh tonne capacity coke oven battery) to New York-listed SunCoke Energy for Rs 368 crore.
Vishambhar Saran, Chairman of VISA Steel said, “This is a great opportunity for VISA Steel to partner with SunCoke, known for its operating and technological expertise, to grow the coke business.”
In October, Visa Steel transferred the coke oven assets to its subsidiary Visa Coke Ltd. Saran said, “The demand for coke from large and medium size steel producers has been increasing substantially and there is a potential to grow the coke business on a standalone basis.”
The transaction is expected to close in the first quarter of 2013, subject to customary conditions, including approval from VISA Steel shareholders, Visa Steel said.
On September 28, 2012, Visa Steel had said that the board had approved the restructuring of the company’s debts and had formally entered into a CDR programme with its lenders on September 25. Now, as part of the efforts to restructure the company and its debt, the company is undertaking efforts to sell off assets and extending loan maturities.
Visa Coke, a subsidiary of Visa Steel is responsible for running its coke-oven battery and buying of coke for its steel plant. Coke is a very important raw material in making steel and coke-oven battery converts coking coal into coke which is then used in the blast furnace to make steel.
Visa Steel has been suffering considerable losses for the past few quarters. In FY 11-12, the company posted a net loss of Rs 118.85 crore. In the first quarter of the current fiscal alone Visa Steel recorded a net loss of Rs 108.67 crore followed by a loss of Rs 36.73 crore in the quarter ended September 30, 2012.
The company has a fully integrated half a million tonne special steel plant in Odisha. The plant includes a coke oven plant in which it has sold 49% stake.
Visa Steel was doubling this capacity which is now under the clouds. Apart from this flagship plant, the company had plans to set up a 2.5 million tonne steel plant and a 500 MW power plant at Raigarh, Chhattisgarh. The company has already acquired 280 acres of land out of the total need of 1,000 acres and the plant has got the environmental clearances.
The company had also said that it will set up a 1.25 million tonne steel plant with a 1 lakh tonne manganese alloy plant and a 300 MW power plant in Madhya Pradesh.
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