Billionaire Anil Agarwal’s metals-to-oil group on Wednesday said it will make an upfront payment of almost $40 million (about Rs 292 crore) for the acquisition of Videocon Industries, which will help it become the largest shareholder in the Ravva oil and gas fields in KG basin. The National Company Law Tribunal’s Mumbai bench on Tuesday approved the acquisition of bankrupt Videocon Industries by Vedanta group firm Twin Star Technologies, with the lenders set to take a haircut of about 90 per cent.
In a filing to the London Stock Exchange, Agarwal’s Volcan Investments Ltd said its wholly-owned Indian subsidiary, Twin Star Technologies India Ltd (TSTIL), had submitted a resolution plan for Videocon Group companies, under the Insolvency and Bankruptcy Code of India.
“The bid for the Videocon asset consists of an upfront payment of almost $40 million, which is less than 10 per cent of the total bid value, and the remaining deferred payments shall begin post completion of 2 years from the acquisition date,” it said.
Agarwal made a fortune buying state companies and fixing them up, building a metals and mining powerhouse. His group acquired state-owned Bharat Aluminium Company Ltd (BALCO) in 2001 and Hindustan Zinc in 2002 and bankrupt assets such as Electrosteel and Ferro Alloys Corporation Limited.
It acquired Sesa Goa in 2007 and VS Dempo in 2010. It acquired Cairn India in 2012. Its 22.5 per cent stake in Ravva oil and gas field came from the Cairn acquisition.
Ravva field produced 22,000 barrels of oil and oil equivalent gas per day.
“Mr. Anil Agarwal’s visionary leadership has successfully turned around various stressed assets in the past. The Videocon acquisition shall be no different and we are really excited to nurture the asset for overall value creation for our employees, customers, and stakeholders,” the filing said.
Globally, Volcan’s business interest ranges from zinc, iron ore, steel, copper, aluminum, power, oil and gas.
“We are excited with this acquisition mainly for Videocon’s 25 per cent participating interest in Ravva oil field. This acquisition shall therefore consolidate the overall interest of Volcan Group at 47.5 per cent,” it said.
Other shareholders in the fields that lies in shallow waters of Bay of Bengal are ONGC (40 per cent) and Ravva Oil Singapore (12.5 per cent).
“Apart from the oil assets, Videocon Group Companies has a diversified asset base in real estate and electronics segment which shall further bring synergies with our growing electronics and LCD business,” it said.
Videocon, a consumer durables company manufacturing air-conditioners to washing machines, was among the first 12 companies pushed into bankruptcy after directions from the Reserve Bank of India in 2017.
It had unpaid loans of Rs 59,451.87 crore as of November 12, 2018, according to bankruptcy case-related disclosures on the company’s website. Of this, Rs 57,443.62 crore due to over three dozen banks and other financial institutions, was admitted for settlement.
Another Rs 25,553 crore claims were made by operational creditors.
