Videocon: Selling assets to repay debt
The Video con stock fell by another 10 percent on Wednesday, after falling 36 percent early this week. The share price has been falling on rising concerns over debt repayment issues. Recently, Dena Bank had tagged the firm a non-performing asset, and there are news reports suggesting other banks are considering a similar move. The company is taking steps to cut its debt, worth ~22,000 crore, to Indian banks. It owes another ~22,000 crore to foreign banks, serviced by its foreign assets; there is no default on overseas loans. The group has sold several assets in the past three years to meet its commitments and plans to sell more. Here are its assets which are on the block or have already been sold
KENSTAR CONSUMER BUSINESS
The company has put its Ken star consumer goods business and brandon sale and, according to inside rs ,20 companies have made a bid for the business, which sells home appliances. It could fetch around ~2,000 cr ore for the firm, sources say
DTH BUSINESS
The direct-to-home TV business is being merged with Dish TV, creating India’s No. 1 satellite TV company. The promoters of Videocon will receive shares in the merged entity. On Tuesday, the Competition Commission of India cleared the merger proposal by both companies. In 2014, the satellite TV business was listed on Nasdaq and the group raised $300 million
LAND BANK
The group has funds blocked in power and coal businesses, which have 1,500 acres in Madhya Pradesh and another 700 acres in Chhattisgarh, with all related infrastructure. The group will sell part of this land bank. Its headquarters in Fort, Mumbai, is already sold for ~300 crore
INSURANCE JV
The group owns majority stake in a general insurance venture with Liberty Mutual of United States. It plans to reduce its stake at a valuation of ~5,000 crore
OVERSEAS OIL BLOCKS
The group has oil and gas fields in Indonesia and Brazil, which the company claims are valued at $12 billion. Of this, the Indonesian block is likely to start production late next year or early 2019, while the Brazilian fields are estimated to produce its first oil in 2020. The group plans to use the profits from its share of oil in the field to repay domestic debt
MOZAMBIQUE FIELD
In 2013, Videocon sold its Mozambique gas field for $2.5 billion. The proceeds were used to repay bank loans in India and abroad
SPECTRUM
In March last year, the company sold spectrum to Bharti Airtel for ~4,428 crore. The company used the funds to repay Indian bank loans. In the past six years, the company has paid ~26,000 crore in interest to banks. The company said it fell into bad times due to cancellation of telecom licences by the Supreme Court in 2012