Visa Steel shares jumped as much as 20 per cent in the early trade after a report that lenders of the company have decided to convert a large portion of their loans into equity using the RBI’s strategic debt restructuring (SDR) scheme. (Reuters image for representation only)
Visa Steel shares jumped as much as 20 per cent in the early trade on Wednesday after Financial Express reported that lenders of the company have decided to convert a large portion of their loans into equity using the Reserve Bank of India’s (RBI) strategic debt restructuring (SDR) scheme.
At 9.59 am, stocks of the company were trading 14.47 per cent up at Rs 16.53. Sensex was trading 161.88 points down at 25,489.96 at around 10.04 am.
Lenders to Kolkata-based Visa Steel have decided to convert a large portion of their loans into equity using the Reserve Bank of India’s (RBI) strategic debt restructuring (SDR) scheme, bankers aware of the development told FE.
Sources aware of the development told FE that Brazilian steelmaker Gerdau has shown an interest in acquiring a stake in the company.
The company’s gross debt at the end of March 2015 stood at Rs 3,094 crore, up 10.5% over that in March 2014, Bloomberg data showed.
A senior public sector bank (PSB) executive confirmed a consortium of 20 bankers led by State Bank of India (SBI) has agreed on the restructuring. “We have an investment proposal from Brazilian steelmaker Gerdau and are examining it,” the executive said. The banker added the company had agreed to allow the loans to be converted into shares.
Among the lenders to Visa are Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank a few banks from the SBI Group and Syndicate Bank.
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