Videocon goes bankrupt: Bids invited for debt-ridden firm under insolvency resolution process

New Delhi: The resolution professional of debt-ridden Videocon Industries on Tuesday invited bids from prospective buyers to take control of the firm, which has interest ranging from consumer electronics to oil and gas. The corporate insolvency resolution process (CIRP) of Videocon Industries Ltd (VIL), which has debt of around Rs 20,000 crore, was commenced under the Insolvency and Bankruptcy Code (IBC) following an order by the NCLT Mumbai on 6 June 2018. In a public announcement, VIL Resolution Professional (RP) Anuj Jain said insolvency resolution process in respect of 11 group companies of VIL has also commenced and for other four other entities, order is expected to be passed by the NCLT shortly.

In the beginning of this year, the country’s largest lender State Bank of India (SBI) had filed separate insolvency proceedings against Videocon Industries and Videocon Telecommunications Ltd.

As per the criteria listed out by the RP, corporates, individuals or consortium of investors must have a minimum consolidated net worth of Rs 2,000 crore at group level in the immediately preceding financial years, and turnover of Rs 1,000 crore at group level during any one of the three immediately preceding financial years. For financial institutions, PE funds, asset reconstruction companies, NBFCs, other financial investors, including consortium of investors, minimum asset under management must be Rs 2,000 crore in the immediately preceding financial year or committed funds available for deployment/ investment of at least Rs 2,000 crore as on 31 March 2018. [caption id=“attachment_5263581” align=“alignleft” width=“380”]  Venugopal Dhoot, chairman, Videocon Industries[/caption] It would be mandatory for prospective resolution applicants to submit their bid before 5 October 2018, Jain said in the announcement. The RP also said prospective bidders must have evidence to showcase experience in the running of large industrial businesses, preferably consumer electronics, and/or oil and gas during any three of the preceding financial years. The bidders must also have the ability to turnaround large industrial business preferably consumer electronics business either directly or through joint venture. In its heydays, Videocon was known for its consumer durables business. It then diversified into oil and gas, DTH and telecom sectors, with the latter two ventures proving to be unsuccessful. The company then sold off its DTH business to Dish TV and telecom business to Airtel. The Videocon Group is under investigation for alleged quid-pro-quo over Rs 3,250 crore loan by ICICI bank to it in 2012. The bank had also ordered an independent probe into allegations of ‘conflict of interest’ and ‘quid pro quo’ in bank’s MD and CEO Chanda Kochhar’s role.