The Orissa High Court has granted an interim stay on corporate insolvency resolution proceedings against VISA SteelBSE -1.19 %, a special-steel producer with plants in Kalinganagar, Odisha, until its next hearing on April 12.
The Kolkata bench of National Company Law Tribunal (NCLT) will hear the case of VISA Steel on Monday, March 19. State Bank of India (SBI) had moved the NCLT to initiate proceedings against the loss-making firm under the Insolvency and Bankruptcy Code, 2016.
VISA Steel, which is on the list of the Reserve Bank of India’s corporate defaulters, approached the High Court arguing it owns banks less than Rs 5,000 crore cut-off the RBI itself had set to identify defaulters to be sent to NCLT.
As per the central bank, anyone with outstanding of Rs 5,000 crore or more, 60% of which was classified as nonperforming as of March 31, 2016, could be tried by NCLT.
According to recent media reports, the company owes banks, including SBI, Bank of Baroda, Bank of India, Punjab National Bank and Canara Bank, around Rs 3,600 crore.
Special-steel producer VISA Steel managing director Vishal Agarwal declined comment since the case was sub-judice.
In its interim order dated March 15, the Orissa High Court observed that VISA Steel had an arguable case and granted the loss-making firm an interim stay on further proceedings pending before NCLT Kolkata bench until the case’s next hearing on April 12.
Respondents, the RBI and SBI, have been asked to counter VISA’s claim.
While special-steel producer’s half-a-million-tonne special steel plant is running at less than capacity, it’s other units of ferro chrome, power, coke, sponge iron and pig iron are all running at full capacity, a senior official said on condition of anonymity.
Source: Economic Times