Union Bank puts ₹410-cr Visa Steel Loan on sale

Mumbai: Union Bank of India has put on sale ₹410-crore loan of bankrupt Visa Steel and fixed the reserve price at ₹164.28 crore, entailing a recovery of 40%, two people aware of the development said.
Last month, State Bank of India had sold ₹697 crore Visa Steel loan to Ares SSG-backed Asset Care Reconstruction Company (ACRE) for ₹230 crore, as reported by ET on February 25.

"Union Bank's ask is higher at 40% compared to 33% recovered by SBI and, therefore, we will wait to see if Union will receive bids at this price," said a senior executive at an asset reconstruction company (ARC).

Union Bank of India is following an open bidding process where bidders are invited at above the reserve price, they said. Interested bidders including asset reconstruction companies have until March 8 to submit expression of interest, people cited above said.

Union Bank plans to follow it up with a Swiss challenge on March 17, whereby others get to better the top bid of the auction.

ACRE has been aggregating Visa Steel loans from other lenders over the last 3-4 years. It had acquired loans from Bank of Baroda and SIDBI in the past.

Visa Steel, which makes high carbon ferro chrome for end use in stainless steel manufacturing, was admitted to the National Company Law Tribunal for debt resolution based on an application by Punjab National Bank in November 2022, and Ajay Kumar Agarwal was appointed as the interim resolution professional.

However, the Orissa High Court has since stayed the corporate insolvency resolution proceedings.

The company's total principal outstanding stands at ₹2,331 crore, according to the annual report of FY 22.

Lenders have been looking for resolution for over six years now. The account had turned non-performing in 2011-12.