Debt-laden Videocon hopes to raise Rs30,000 cr via Brazilian oil assets sale

Videocon Industries Ltd plans to raise around Rs30,000 crore by selling its stakes in oil blocks in Brazil as part of the debt-laden company's plan to repay bank loans.

Videocon chairman and managing director Venugopal Dhoot

''We will repay banks in the next 2-3 months,'' Venugopal Dhoot, chairman and managing director of Videocon, said in a phone interview with Mint. ''By selling oil blocks in Brazil, we hope to raise around Rs30,000 crore.''

Videocon Hydrocarbon Holdings Ltd, the Cayman Islands firm that owns the stakes, has received interests from some interested parties, Dhoot said, without naming the companies.

Through its subsidiaries and affiliates, Videocon Industries holds economic interests in oil and gas concessions in Brazil, Indonesia and East Timor.

Dhoot also rubbished reports that claimed that he had fled India to avoid scrutiny from bankers over Rs20,000 crore of debt owed by his various firms.

''I am very much in India and have no intention to ever going out of the country. In fact, I am most comfortable here and have not stepped out of India for the last five years,'' Dhoot told The Economic Times.

The State Bank of India had in the first week of January referred Videocon Industries to bankruptcy court after lenders were unable to resolve its loan by 31 December. A consortium of lenders have also decided to take to bankruptcy court all step-down subsidiaries of Videocon Industries in order to put in place a comprehensive resolution plan.

The step-down subsidiaries of Videocon Industries are engaged in activities such as manufacturing, sale and distribution of consumer goods.

KPMG has been appointed as resolution professional for all these companies.

Speaking to ET, Dhoot also said he is firming up plans to pay lenders back. "I will strive to repay every single penny owed to the banks,'' he said.

He has hired a team of financial experts to work out the best options including sale of various assets to repay lenders.

According to Videocon Industries's FY17 annual report, the company is liable to repay the liability of other group companies to the extent of Rs5,082 crore as on 31 March 2017. The company's total debt stood at Rs19,506 crore as of March last year.

Last month, the country's largest lender State Bank of India (SBI) filed separate insolvency proceedings against Videocon Industries and Videocon Telecommunications Ltd. They were both part of the second list of big corporate defaulters put out by the Reserve Bank of India (RBI).

Videocon owns stakes in four major blocks in Brazil through an equal joint venture, IBV Brasil Petroleo Ltd, with Bharat Petroleum Corp. Ltd. Brazil's national oil company, Petrobras SA, is the operator in three of the four blocks.

Oil and gas became part of Videocon's portfolio in 1994 when the company signed a production-sharing contract for the Ravva oil and gas offshore block, off Kakinada in Andhra Pradesh where it is a 25-per cent non-operating partner with Oil and Natural Gas Corp Ltd (ONGC) and Vedanta Resources Plc's Cairn India Ltd as other partners in the block.

In a bid to pare its debt, Videocon in 2013 had sold its 10-per cent stake in the Mozambique gas field to ONGC Videsh Ltd (OVL), the overseas upstream arm of ONGC, and Oil India Ltd for close to $2.47 billion.

''Oil and gas business has been a tremendous success for us. We are the largest and most successful Indian private sector explorer in the world today. Total reserves in the fields that we have discovered in Indonesia and Brazil, have around 4 billion barrels of oil and oil equivalent. We are working towards getting those fields in production. We were in the phase of the development cycle of these projects,'' Saurabh Dhoot, executive chairman of Videocon d2h, said in a July interview.

Videocon's oil assets in Brazil are estimated to be worth Rs40,000 crore, according to Venugopal Dhoot.