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Visa Steel Ltd will close the Rs 368-crore transaction with SunCoke Energy Inc for 49 per cent stake in Visa Coke Ltd (VCL), its wholly owned subsidiary by January end.
Vishal Agarwal, Vice-Chairman and MD, Visa Steel, told Business Line on Wednesday the deal with NYSE-listed SunCoke will be wrapped up and formalised by next month.
A significant part of the deal consideration will be used to reduce its long-term as well as working capital borrowings of around Rs 2,000 crore.
The transaction, structured by KPMG, would bring in Rs 355 crore to Visa Steel and the balance would go to the equity of VCL.
VCL, having a four lakh tonnes-a-year heat recovery coke plant and steam generation units, has been carved out of Visa Steel’s Kalinganagar three lakh tonnes a year sponge iron project in Odisha.
The Kalinganagar coke unit is located on a plot of 25 acres and the sponge iron and steel project covers an area of 500 acres.
The deal wrap up would involve payment (in rupee terms) by SunCoke, share transfer and representation of SunCoke on the VCL board.
Visa Steel has sought approval of the lenders as well as shareholders to the joint venture proposal.
The shareholders ballot result would be known on January 7.
Parallel to this, a meeting with lenders is expected to be held.
Visa Steel in September got a CDR package approved, which provided for an initial two-year moratorium and an extended term of repayment for next eight years. A consortium of 18 banks, led by SBI, is the lending group.
The CDR has also brought down interest rate by 300 basis points, Agarwal said.
Meanwhile, Visa Steel’s 65:35 joint venture with Bao Steel of China for manufacturing one lakh tonnes a year of high carbon ferro chrome is slated to be operational, according to a revised deadline, in March next year.
The joint venture would feed Bao’s Shanghai stainless steel unit with 70 per cent of its production.
The rest would be for domestic sale.
The Visa Steel stock on Wednesday finished 0.32 per cent down at Rs 47.35 on the BSE.
jayanta.mallick@thehindu.co.in
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