Visa Steel Ltd will get 18 months to find a strategic partner for its special steel business.
The lenders have decided to move in this direction owing to losses in the special steel or alloy steel business.
Visa Steel, which is in the process of transferring its special steel business to a wholly owned subsidiary, Visa Special Steel Ltd, has said that the lenders of the company, in a Joint Lenders Forum (JLF) meeting held on September 22, have decided to go in for Strategic Debt Restructuring (SDR) for the company’s special steel business.
According to sources, Visa Steel was on the lookout for an overseas partner for its special steel business. The company’s coke and chrome businesses already have foreign partners.
Visa Steel’s business transfer plan, through court, was to facilitate fund raising through a strategic investor.
The company’s current debt is at over ₹3,000 crore.
Difficult environment
In the past few years, the 0.5-million-tonne a year special steel plant at Kalinganagar in Odisha, has suffered from high raw material costs coupled with a decline in demand.
With iron ore not available at a viable price, the production unit was forced to operate below its installed capacity.