The hearing for Visa Steel at the Kolkata bench of the National Company Law Tribunal (NCLT) is likely to be scheduled on March 19, sources with direct knowledge of the development told FE. The loss-making Visa Steel is expected to be admitted for corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016, on Monday since banks are unlikely to accept the out-of-court settlement plan submitted by the company, the sources added. In a stock exchange notification on January 5, Visa Steel had said, “We understand that an application has been filed by State Bank of India with hon’ble NCLT Kolkata bench to initiate CIRP for the company under IBC 2016. The company is in discussion with SBI for settlement.” “The company is likely to be admitted for insolvency proceeding on Monday,” one of the sources quoted above said on conditions of anonymity. Visa Steel did not comment on queries regarding this story.
Visa Steel is one of the 28 companies in the Reserve Bank of India’s (RBI) second list of corporate defaulters that were referred to the NCLT after December 31, 2017. While RBI had drawn up the list in August, it had given the companies time till the end of the year to come up with resolution plans, failing which, they would be referred to the NCLT.
According to details on the firm’s website, Visa Steel produces special steel, it posted a net loss of Rs 119.48 crore in FY17 on revenues of Rs 1,544.36 crore, according to Bloomberg data. The total debt of the company stood at Rs 3,884 crore during the fiscal. Information in the firm’s annual report for 2016-17 showed that apart from SBI, the other lenders to Visa Steel included Bank of Baroda, Bank of India, Punjab National Bank and Canara Bank.