Videocon Industries to face insolvency proceedings
Videocon Industries tops the list of 12 defaulters referred to the National Company Law Tribunal (NCLT) by the State Bank of India (SBI). The company owes more than Rs. 45,000 crore to the banks.
SBI's move is in accordance to Reserve Bank's second defaulter list issued in August 2017, when it had asked banks to resolve these bad loans through debt recast package outside NCLT by the end of the year 2017. Other companies to face insolvency are Essar Projects, Jaiswal Neco, Jai Balaji, Monnet Power, Uttam Steel, Visa Steel and Videocon Telecom.
Videocon Industries had offered to monetisation land assets in metro cities and repay loans to recast its debts. Earlier, on December 15, the I&B Ministry approved the merger of Dish TV and Videocon d2h, making way for Videocon to repay some of its debt. Also, in November, the Videocon Group sold its home appliances brand Kenstar to private equity firm Everstone Group. While the company sold its spectrum in six circles for Rs. 4,428 crore to Bharti Airtel.
The company which in its glory day was India's leading consumer durable manufacturer fell into disgrace mainly due to its telecom venture where it met huge losses. Following the alleged 2G scam, in 2012, the Supreme Court of India revoked Videocon Telecom's 21 licences, when it was providing services in 16 circles across the country. Recently, the company had indicated that it will sue the government seeking Rs. 10,000 crore towards damages caused to its telecom business owing to the earlier 2G scam order. Videocon Industries' television manufacturing business was ruined by the tough competition presented by cheaper Korean brands as well as the swift and repeated technological changes in the TV industry from glass shell to LED.
The company is also looking to exit its general insurance venture and sell some of its oil assets in Indonesia and Brazil to reduce its debt. Meanwhile, at lunch hours, the stock of Videocon Industries was struck in its upper circuit at Rs. 21.50 per share, up 4.88 per cent.