Visa Steel to invoke strategic debt restructuring tool

Company in discussion with lenders for preparing a conversion package to enable inviting a strategic investor in its special steel business

Loss-making Visa Steel today said that the lenders of the company in its Joint Lenders Forum (JLF) meeting held on September 22 have decided to invoke Strategic Debt Restructuring (SDR), a tool introduced by the Reserve Bank of India which will give lenders the right to convert their outstanding loans into majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package.

Through an exchange filing, the company also informed that it is in discussion with lenders for preparing a conversion package to enable inviting a strategic investor in its special steel business.

Kolkata-based Visa Steel operates a 0.5 million tonne integrated special steel plant, 180,000 tonne ferro chrome unit and a 75 MW captive power plant at Kalinganagar in Odisha. The company is also progressing towards establishing a steel plant at Raigarh in Chhattisgarh and plans to set up a steel unit and manganese alloy plant in Madhya Pradesh.

On September 28, 2012, Visa Steel board had approved restructuring of the company's debt and had formally entered into a CDR program with its lenders.