Banking News

visa: ACRE offers State Bank of India Rs 230 crore for Visa Steel loans

Ares SSG Capital-backed Asset Care and Reconstruction Company (ACRE) has given a binding offer of ₹230 crore to the State Bank of India to acquire ₹697.2 crore outstanding loans given to Visa Steel, said two people aware of the development.

The offer from ACRE, an asset reconstruction company, is at the reserve price set by the bank and equates to a recovery of 33 paise on outstanding loans for the country’s largest state-run lender by assets, the people said.

Last month, SBI issued a notice on its website inviting expressions of interest on January 12 and firm bids by February 10.

SBI will soon hold a Swiss challenge auction with ACRE’s offer of ₹230 crore as an anchor bid. While inviting offers from ARC, the bank said that if it received only one bid, it could hold a Swiss auction. No other ARC submitted a firm bid for the Visa Steel loan.

ACRE did not respond to ET’s request for comment.

In 2019, ACRE acquired a loan of about ₹150 crore from Bank of Baroda for 25 paise on a rupee. It also acquired Visa Steel loans from Sidbi, a financial institution, people said.

The sale of Visa Steel loan comes after repeatedly failed attempts by lenders to admit the company for corporate insolvency.The National Company Law Tribunal’s Cuttack bench admitted Visa Steel for insolvency proceedings in November last year. Within a month, the High Court of Orissa stayed the insolvency process until further orders.

This is the second time the company has received such a relief. The company was admitted for insolvency in 2018 by the Kolkata bench of NCLT. However, the High Court of Orissa granted an interim stay on the NCLT’s order to admit it. The Supreme Court had stayed the NCLT order, which was vacated in November last year.

Lenders have classified loans of Visa as non-performing accounts since 2012. It has a principal outstanding loan of ₹2,331 crore, according to the company’s annual report. Punjab National Bank, Union Bank, Hudco and Exim Bank are among other lenders of Visa Steel.

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