The bank has set a reserve price of ₹230 crore for an e-auction which is slated for February 10.
SBI’s offer to sell this account comes even as the Orissa High Court, for the second time, stayed initiation of the insolvency process against Visa after the Cuttack bench of the National Company Law Tribunal (NCLT) had admitted the borrower for commencement of bankruptcy proceedings, acting on a plea by
() late November.
“This loan account was part of the second list of the Reserve Bank of India, way back in 2017, and it is yet to be admitted to the bankruptcy court,” said a person familiar with the bank’s line of thinking. “After the latest stay by the Orissa High Court, it was thought best to find a buyer for the account because it is unlikely the promoters are going to let this resolve.”
In November, the Cuttack bench of NCLT had admitted a plea against Visa Steel, ending more than four years of unsuccessful efforts by banks to take the company into administration.
The second – and the latest – stay by the Orissa High Court came just a day before banks were about to form a committee of creditors to start insolvency proceedings. As far back as 2018,
had got a stay against an SBI’s insolvency plea against the company from the Orissa High Court. Visa is a Kolkata-based company with plants based in Kalinganagar, Odisha.
It was also in the RBI’s list of corporate defaulters, to be admitted for insolvency resolution.”This company has been dodging banks for long and has been finally admitted by the NCLT. Perhaps SBI thinks that it is better to sell the loan to an ARC rather than wait for a long-winding bankruptcy process, which can be delayed beyond repair by promoters,” said a person familiar with the account.
The company had a half-a-million tonne special steel capacity. It also had units of ferro chrome, power, coke, sponge iron and pig iron.
The company owes lenders led by SBI a total of ₹3,400 crore. Besides SBI and PNB, the other lenders to the company are Bank of India,
, and .
SBI’s move comes even as the government-backed National Asset Reconstruction Co of India Ltd (NARCL) is also evaluating a bid for the company. It remains to be seen if other lenders follow SBI and try to find a buyer for their loans.