Visa Steel exits insolvency as NCLT allows withdrawal of CIRP proceedings

In a significant turnaround, Visa Steel Limited has successfully exited the Corporate Insolvency Resolution Process (CIRP) after the National Company Law Tribunal (NCLT), Cuttack Bench, permitted the withdrawal of the insolvency application against the company. The order, dated September 26, 2025, closes a prolonged legal battle that had cast uncertainty over the steelmaker’s future.

The insolvency proceedings were initiated following a petition by the State Bank of India (SBI) in December 2017 under Section 7 of the Insolvency and Bankruptcy Code (IBC). SBI claimed a default of over ₹982 crore, dating back to July 2012. After extensive litigation, the NCLT admitted the case into CIRP on November 28, 2022, appointing an interim resolution professional and imposing a moratorium.

However, the order was almost immediately stayed by the Orissa High Court on December 21, 2022, halting the CIRP. The recent withdrawal application—likely stemming from a settlement between Visa Steel and its financial creditors—has now been formally approved by the NCLT, bringing the insolvency process to an end.

The NCLT’s 2022 admission order had dealt with key contentious issues, particularly the question of limitation. The tribunal rejected the corporate debtor’s argument that the petition was time-barred, noting that acknowledgements of debt by Visa Steel in financial statements and correspondence as recently as 2017 extended the limitation period under the Limitation Act. It also dismissed objections relating to a demerger scheme involving Visa Special Steel Limited, observing that the scheme had been stayed by the Supreme Court.

The withdrawal marks a critical reprieve for Visa Steel, allowing it to avoid liquidation and continue operations.

About Visa Steel

Visa Steel operates a 125,000 TPA Ferro Chrome Plant at Kalinganagar, Odisha, equipped with five Submerged Arc Furnaces and three 25 MW power-generating units. Promoted by Vishambhar Saran and family, the company produces high-carbon ferro chrome meeting international quality standards for use in stainless steel and special steel manufacturing.

For FY25, the company reported consolidated revenue from operations of ₹566 crore, compared to ₹670 crore in FY24. Operating profit rose to ₹32 crore in FY25 from ₹6.6 crore in the previous year. Due to lack of working capital, operations continued under a conversion arrangement.

Visa Steel has been under financial stress since 2011–12 due to external factors. Despite debt restructuring exercises in September 2012 and December 2014, lenders did not release sanctioned facilities for operations and instead adjusted them against interest, leading to depletion of working capital. The company has argued that these exercises amounted to mere “evergreening” of debt without consideration of their adverse impact on operations.

Currently, about 95% of the company’s debt has been assigned by lenders to Assets Care & Reconstruction Enterprise Limited (ACRE). Visa Steel is engaged with ACRE for restructuring its outstanding loan exposure through an out-of-court settlement.

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