Videocon Industries Limited (VIL) was founded in the year 1986. Current director of Videocon claims that Videocon is the first company to bring colour TV’s in India.
Around 1990 Videocon was one of the most iconic consumer electronic brands in the India. Promoters of the Videocon further diversified business of the company in Oil, Gas, Telecom Retail and DTH service. Diversified businesses of the company were capital intensive and for running the same Company borrowed huge amount of money from the financial institution. Though Company diversified into many businesses, consumer durables was largest source of revenue, but Company failed to build its brand royalty and other competitors like Samsung, LG, Sony overtook them.
In three consecutive financial years until September 2008, Videocon’s India business had registered standalone profits of over Rs. 800 crores with a focused approach in the consumer electronics business. Videocon’s debt surged because of its failed telecom services business – it lost about Rs. 7,000 crores in telecom – and the picture tube plant modernisation in Gujarat that cost Rs. 4,000 crores. Over time, the market value of the fridge-to-phone company tumbled way down to Rs. 600 crores. The decline started with Dena Bank classifying its Rs 520 crore loan to Videocon as an NPA in the quarter ending March 2017.
Admission for bankruptcy Proceedings
Application for initiation of bankruptcy proceedings under Insolvency and Bankruptcy Code, 2016 (IBC) against the Videocon Industries Limited (VIL) was admitted by National Company Law Tribunal (NCLT) vide order dated June 06, 2018. The claim against the VIL and Videocon Telecommunications and other group companies by financial creditors added up to a whopping more than Rs.60,000 crore making it India’s one of the largest bankruptcy case. Consortium of banks led by State bank of India filed multiple pleas in various courts against VIL and 14 other Companies after they defaulted on payments to a consortium of banks. Total amount claimed by financial creditors against Videocon Industries Limited is Rs. 59,451.87 Crores out which State Bank of India has claimed Rs.11,175.25 crores and claim accepted of SBI is Rs. 10,978.58 Crores.
Consolidation of Insolvency proceedings
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