Videocon Industries placed under bankruptcy proceedings
09 Jun 2018
Videocon Industries is now up for grabs with the Mumbai bench of the National Company Law Tribunal admitting the company under the Insolvency and Bankruptcy Code, reports quoting unidentified banking sources said on Friday.
IBC proceedings against Videocon Industries follow an insolvency petition filed by State Bank of India against the company in December last year, on directions from the Reserve Bank of India.
NCLT also reportedly appointed Anuj Jain from KPMG as the interim resolution professional for the company.
Videocon Industries is named in the second list of insolvent companies comprising 28 stressed corporate accounts, brought out by RBI in August 2017, for bankers to take action under the insolvency process. RBI had given banks six months to resolve the cases outside the NCLT, failing which, the insolvency process would be initiated.
Videocon Industries promoter Venugopal Dhoot said the company will not challenge the insolvency admission. “We already had a proposal approved by lenders where all our cash flows from the oil business would be given to banks. But before we could proceed on that, the NCLT issue came up. We are certain lenders will agree to withdraw since under our plan, they will get repaid fully,” BloombergQuint quoted Dhoot as saying over the phone.
Videcon reportedly owed a consortium of 27 financial creditors led by SBI more than Rs20,000 crore in overdue loans, according to the bankers. As of 31 March 2016, gross borrowings of Videocon stood at over Rs47,000 crore, according to the Credit Suisse’s India Corporate Health Tracker report released in February.
Videocon Industries entry into the oil exploration business muddled its finances with losses piling up and the company finding it difficult to sell off some of its assets to repay banks.
Lenders have been trying to resolve the company’s financial stress since 2016, under the previous stressed asset management framework.
Meanwhile, Dhoot is alleged to have been involved in suspicious business dealings with Deepak Kochhar, husband of Chanda Kochhar who headed ICICI Bank.
The Central Bureau of Investigation in March initiated an enquiry against Dhoot following allegation by investor Arvind Gupta that ICICI Bank’s loans to Videocon Group were approved under suspicious circumstances (See: Videocon loan: CBI probes ICICI Bank-Deepak Kochhar nexus).