Videocon resolves with banks to stay out of NCLT

By: | Updated: November 24, 2017 3:19 AM

Videocon Industries, which was mentioned in the second list of stressed assets that the Reserve Bank of India sent to the banks in August, has finalised a resolution plan involving deep restructuring that is likely to be accepted by its lenders by the end of November, two senior bankers with direct knowledge of the development said.

Videocon Industries, Punjab National Bank, NCLT, Bombay Stock Exchange, Venugopal Dhoot, Videocon shares, Andhra Bank, BangaloreThe total debt of Videocon Industries stood at Rs 47,554 crore at the end of December 2015, data from the company?s annual report for the year showed.

Shamik Paul & Shritama Bose

Videocon Industries, which was mentioned in the second list of stressed assets that the Reserve Bank of India sent to the banks in August, has finalised a resolution plan involving deep restructuring that is likely to be accepted by its lenders by the end of November, two senior bankers with direct knowledge of the development said. While the State Bank of India is the lead banker to Videocon Industries, the other lenders in the consortium include Punjab National Bank, Dena Bank, Central Bank and Andhra Bank. The total debt of Videocon Industries stood at Rs 47,554 crore at the end of December 2015, data from the company’s annual report for the year showed. The company has not filed its annual report for 2016 with the stock exchanges till date. It posted a net loss of Rs 1,368 crore for the financial year ending December 2016 on total revenues of Rs 10,311 crore on a standalone basis, according to data from Bloomberg.

“Banks have accepted our resolution plan. The plan is spread over 15 years. But the banks will not have to take any haircut on this account. We will pay the entire principal and interest,” Venugopal Dhoot, chairman and managing director, Videocon Industries, told Financial Express. The bankers said that since they are close to signing the resolution, the company is unlikely to be referred to the National Company Law Tribunal (NCLT) at the end of December. The central bank has given lenders time till December 13 to resolve the accounts mentioned in the second list outside the NCLT. If they fail to come up with viable resolutions by December 13, the accounts will have to be referred to the NCLT by the end of the month.

“We have a lot of land and that will be monetised in phases to reduce our debt. We plan to raise Rs 10,000 crore though sale of land assets in cities like Chennai, Bangalore, Kolkata and Mumbai. Our plan is to raise Rs 2,000-3,000 crore every year,” Dhoot said. He further added that the current rise in oil prices would also help the company to pare its debt. Videocon has business interests in oil and gas, consumer electronics & home appliances, real estate, mobile handsets and DTH services. In the oil and gas sector, Videocon through its various subsidiaries and affiliates holds interest in international oil and gas assets in Mozambique, Brazil, Indonesia and East Timor, data on the company’s website shows.

“We are in the final stages of signing the resolution plan with Videocon. We expect it will be done in the next 2 weeks,” a senior banker with a large public-sector bank said on conditions of anonymity. Dhoot said that the new rate of interest as per the resolution plan is close to being finalised and added that it would be favourable to the company. Videocon’s shares closed at Rs 12.25 on the Bombay Stock Exchange on Thursday, down 2.78% from the previous close.

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