Videocon requests NCLT to include overseas oil assets in insolvency process
The move comes after a consortium of lenders led by the SBI have invited bids for the group's Brazilian and Indonesian assets via ads.
Videocon Group’s consumer electronics business was admitted for insolvency during April, but the oil assets were left out by lenders in the bankruptcy filing.
The company on Tuesday requested the National Company Law Tribunal (NCLT) to include details of its oversees oil and gas assets in the information memorandum that would be circulated to potential bidders and to restrain lenders from selling these assets.
“The entire funding for these oil assets was done by Videocon Industries and these are controlled by the company,” said Sandeep Ladda, a lawyer representing Videocon and its founder Venugopal Dhoot.
The move comes after the consortium of lenders to Videocon, led by State Bank of India, invited bids for the group’s oversees oil and gas assets through newspaper advertisements. Expression of interest had to be submitted latest by Thursday, August 22, as per the invitation.
Lawyers representing Videocon argued that the beneficial ownership of the Brazilian and Indonesian assets vests with Videocon Industries and that the resolution professional of the company be directed to treat all assets and properties of the subsidiary as assets of the parent company.
SBI, however, argued that assets of the two overseas subsidiaries do not fall under the IBC within Indian jurisdiction and any move to bring these assets under IBC would run into cross-border law applicability issues.
Bharat Petroleum Corporation Limited (BPCL), which has an equal stake in the oversees companies along with Videocon, is against including these assets in the insolvency resolution process or the moratorium.
“The relief will directly impact Bharat Petroleum and the impact will be for an amount of Rs 14,000 crore,” said a lawyer representing BPCL. “This amount is likely to be annulled if the reliefs are granted.”
NCLT would hear the matter on Thursday.
SBI had last month filed multiple pleas in various courts against Videocon Industries and 14 other companies controlled by founder Venugopal Dhoot to recover Rs 20,000 crore after they defaulted on payments to a consortium of banks.
The court appointed Mahender Khandelwal as the resolution professional and gave a go-ahead for consolidating the insolvency proceedings of 13 Videocon group firms into a single process.