Indonesian billionaire joins race for Videocon
Videocon Industries owns a stake in the prized Ravva oil field in the Krishna-Godavari basin.
All eight suitors have submitted formal expressions of interest (EoI) and will soon start due diligence on the company, for which a process to find a buyer was formally kickstarted in August.
The other suitors are said to include both strategic and financial investors and a state-run oil and gas company, according to banking sources. Despite the diversified nature of operations of Videocon Industries, 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 the holding companies for their electronics business. Their combined net worth is estimated at $38 billion, making them amongst the five richest families in Asia.
Videocon Industries owns a stake in the prized Ravva oil field in the Krishna-Godavari basin and has a consumer and home appliances business with four manufacturing plants. The company also owns prime commercial real estate in different parts of India and also has a telecom arm which is not operational.
A group of lenders led by State Bank of India have outstanding dues of Rs 20,000 crore from the bankrupt company that went into financial trouble after the Supreme Court cancelled 122 telecom licences granted to several local and international operators six years ago.
Videocon was among those operators that had invested heavily in the licences and spectrum to roll out its mobile telephony offering.
Videocon’s resolution professional Abhijit Guha Thakurta declined to comment when contacted, while emailed queries to Haldiram’s, Vedanta and Hartono group went unanswered till press-time. “It is a policy of the bank not to comment upon individual accounts and their treatment,” an SBI spokesperson said when contacted.
“There is a real prospect of a resolution for the company provided all stakeholders are supportive of it,” one person said.
The company’s manufacturing plants are said to be of a 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 ever 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 SPV.
SBI had appointed Deloitte as an adviser to find a buyer for those assets in August.