Videocon Industries faces bankruptcy proceedings after the National Company Law Tribunal (NCLT) admitted a plea from lenders, led by SBI. They will also initiate a resolution process with a new owner, which needs to be found through a bidding process over the next 180 days.
Videocon Industries, the flagship company of the Dhoots, owes around Rs 20,000 crore to the banks and has been irregular in clearing its dues. Videocon had availed of loan facilities of over Rs 3,900 crore from SBI.
The debt-ridden firm is hopeful that its lenders will be able to recover up to 80 per cent of the Rs 20,000-crore debt.
The bankruptcy court is due to hear a petition against Videocon Telecom on Thursday. NCLT announced Anuj Jain of KPMG as the interim resolution professional for the case.
However, the action will not cover its subsidiary Videocon Oil Ventures that has loans of around Rs 12,000 crore and owns assets in Brazil and other countries.
“If the process does go through, lenders will recover 75-80 per cent of the value of the loans. Property itself is valued at Rs 8,000 crore, we have 17 manufacturing units, we have a strong brand and a very good network of showrooms,” Chairman Venugopal Dhoot was quoted as saying from the TOI.
According to the Insolvency and Bankruptcy code, Jain will have 180 days to turn around the company, with an option to extend the timeline by 90 days. If a resolution plan is not finalised during the timeline, the company will have to go for liquidation.
Videocon was on the second list of companies identified by the Reserve Bank of India (RBI), where banks were ordered to initiate insolvency action.
In the last two years, Videocon sold its Kenstar brand to Everstone Capital to repay its loans. The company’s headquarters in Fort, Mumbai was sold for Rs 3 billion last year.
