Haldiram's, Vedanta, Indonesia billionaire in race for Videocon
The process to find a buyer for Videocon started in August. All parties have submitted formal expressions of interest (EoI) and will soon start due diligence.
The process to find a buyer for Videocon started in August. All parties have submitted formal expressions of interest (EoI) and will soon start due diligence. Despite the diversified nature of Videocon’s operations, all potential bidders are expected to submit a comprehensive resolution plan and not bid for assets or business verticals piecemeal. The Hartono family, which owns Indonesia’s largest private sector bank and tobacco company, is bidding through one of its holding companies for Videocon’s electronics business. The Hartonos’ combined net worth is estimated at $38 billion, making them among the five richest families in Asia.
Videocon owns a stake in the prized Ravva oilfield in Krishna-Godavari basin, along with a consumer and home appliances business with four manufacturing plants. The company also owns prime commercial real estate and has a telecom arm, albeit non-operational. A group of lenders led by State Bank of India has outstanding dues of `20,000 crore from the company that went into financial distress after the Supreme Court cancelled 122 telecom licences granted to several local and international operators six years ago. Videocon was among the operators that invested heavily in licences and spectrum.
Videocon resolution professional Abhijit Guha Thakurta declined to comment, while emailed queries to Haldiram’s, Vedanta and the Hartono group went unanswered till press time. An SBI spokesperson said, “It is a policy of the bank not to comment on individual accounts and their treatment.” “There is real prospect of a resolution for the company, provided all stakeholders are supportive of it,” said one person in the know.
Videocon’s plants are said to be of high quality and could return to manufacturing at full steam with a little bit of working capital, according to two independent sources. Videocon’s insolvency has been mired in litigation since SBI first dragged the company to the National Company Law Tribunal (NCLT) last year. The lender initially filed 15 separate petitions for insolvency proceedings against Videocon and its various arms but subsequently wanted to consolidate the proceedings after feedback from potential suitors suggested all the arms had inter-linked operations.
The NCLT allowed the consolidation of the various applications only in August this year resulting in significant delays in the insolvency process. The company has subsequently filed an application to stop the lenders from selling its stake in oil assets in Indonesia and Brazil which are held through an offshore special purpose vehicle (SPV).
SBI had appointed Deloitte as an adviser to find a buyer for those assets in August. Videocon had argued at NCLT that the offshore SPV and the stake in the assets should be included in the present insolvency proceedings because loans to the offshore company are guaranteed by the bankrupt parent resulting in a liability on its books. For the time being the NCLT has restrained lenders from selling the offshore assets but is yet to rule on whether those will be included in the insolvency proceedings.