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: India Inc brings you details of the BPL Communication saga before, during and after Rajeev Chandrasekhar’s exit.

Why TPG agreed to have a deal with Rajeev

Days before BPL group patriarch TPG Nambiar filed a suit in the Company Law Board against his son-in-law Rajeev Chandrasekhar accusing him of usurping BPL Communiations, there was a deal being worked between Chandrasekhar and brother-in-law Ajit Nambiar.

Chandrasekhar had agreed to lend Rs 200-250 crore to Nambiar to help him fund the promoter’s contribution in the CDR (comprehensive debt restructuring) of group flagship BPL Limited. TPG’s suit soured the agreement and pushed back BPL’s revival plans. It was this question mark over the future of BPL Limited that forced TPG to agree to a deal with Rajeev Chandrasekhar. Of course, Ajit Nambiar continued to be at it, trying to broker an agreement between the warring father-in-law and son-in-law.

How was the deal brokered?

Ajit Nambiar, the BPL family scion was always in favour of an amicable settlement with Rajeev Chandrasekhar. There was pressure on Ajit’s side to get its much-delayed corporate debt restructure package off the ground and the ongoing litigaton was stalling it.

Moreover, sources say that fund crunch was also hindering the CDR, since the promoters (in this case the Nambiars) were asked to bring in some cash to the table. An out-of-court settlement was the only way to resolve the issue.

Ajit, desperate to revive the consumer electronics business, coaxed father TPG to arrive at an out-of-court settlement. On the other side, Rajeev was keen to divest stake in BPL Mobile and the ongoing litigation over ownership was stalling all possible deals from fructifying. So, he also wanted a speedy solution and the settlement worked out fine as Essar was perhaps just waiting with the money on the table to snap up BPL.

How the settlement money will be used?

This money would be used as the promoter’s funds for the CDR to take off. The CDR involving the consumer durable company’s Rs 1,400-crore debt is awaiting ratification by the Kerala High Court.

The promoters are expected to pay Rs 92 crore towards the CDR package in the initial stage.