The newly-appointed resolution professional (RP) for the Videocon group has sought expressions of interest (EoI) for 13 group companies undergoing resolution using the Insolvency and Bankruptcy Code (IBC), according to a document seeking bids.
This comes after the Mumbai bench of the National Company Law Tribunal (NCLT) on 8 August approved consolidation of the separate resolution processes and approved the change of RP on 25 September. The committee of creditors (CoC) led by State Bank of India (SBI) voted with a majority of 93.5% to appoint Abhijit Guhathakurta as the new RP, replacing Mahendra Khandelwal.
“Pursuant to the provisions of the IBC and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as amended and the NCLT Order, interested and eligible prospective resolution applicants are invited to submit expression of interest for submission of resolution plan for the consolidated corporate debtors,” the document said.
Among the twenty lenders to these companies are Allahabad Bank, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Bank of Maharashtra, Bank of Baroda, United Bank of India and Canara Bank.
Prior to the consolidation, claims of financial creditors of Videocon Industries stood at ₹59,451.87 crore, as on 12 November, 2018 and has not been updated since. State Bank of India’s (SBI) claims were at ₹11,175.25 crore, IDBI Bank ( ₹9,561.67 crore), Central Bank of India ( ₹5,066.77 crore). Claims of financial creditors Videocon Telecommunication Ltd, another group entity, was at ₹26,673.81 crore, with SBI being the largest claimant at ₹4,605.15 crore, as on 12 November, 2018.
These 13 companies under the consolidated process include, Videocon Industries Ltd, Videocon Telecommunications Ltd, Electroworld Digital Solutions Ltd, Century Appliances Ltd, Evans Fraser and Co. (India) Ltd, CE India Ltd, PE Electronics Ltd, Sky Appliances Ltd, among others. The companies are into three business verticals, namely, oil & gas, telecommunications and consumer electronics and home appliances.
According to the document cited above, for a potential resolution applicant that is a private or public limited company, limited liability partnership (LLP) or individuals, the minimum tangible net worth must be ₹100 crore. That apart, for financial investors the minimum assets under management (AUM) or funds deployed should be ₹200 crore. For potential applicants submitting an EOI as a consortium, the eligibility criteria would be the aggregate of the eligibility criteria applicable to such consortium members, adjusted on a weighted average basis.
Meanwhile, between 6 June and 25 September, 2018, the Mumbai bench of the NCLT had initiated corporate insolvency proceedings against several companies of the group after SBI referred them to the dedicated bankruptcy court. According to Videocon Industries’ FY18 annual report, the referral of the company to NCLT under the Insolvency and Bankruptcy Code, 2016, had a severe impact on the perceptions of the dealers/customers on account of uncertainty of the after sales services, forcing the company to offer additional discounts and incentives resulting in losses.
Source: Mint