Debtladen Videocon to sell off stakes in Brazil oil blocks

MUMBAI: Debt-laden Videocon Industries has put its oil blocks in Brazil for sale, a top company executive said in an interview.

The proceeds from the sale will be used to reduce debt and repayment of loans to banks, Venugopal Dhoot, chairman and managing director, Videocon said in a phone interview.

“We will repay to banks in the next 2-3 months,” Dhoot said. “By selling oil blocks in Brazil, we hope to raise around ₹30,000 crore.”He added that the company—Videocon Hydrocarbon Holdings Limited (Videocon), a Cayman Islands firm, has received interests from a Scotland-based company, among others.

Internationally, through its subsidiaries and affiliates Videocon holds interest in international oil and gas Concessions in Brazil, Indonesia, and East Timor.

According to Videocon Industries’ FY17 annual report, the company is liable to repay the liability of other group companies to the extent of ₹5,082 crore as on 31st March, 2017. The company’s total debt stood at ₹19,506 crore as of March last year.

Last month, the country’s largest lender had filed separate insolvency proceedings against two group companies, Videocon Industries and Videocon Telecommunications Ltd. They were both part of the second list of big corporate defaulters put out by the Reserve Bank of India (RBI).

Videocon’s oil assets are in Brazil, where the company has an interest in four major blocks through a 50:50 joint venture company, IBV Brasil Petroleo Limitada, with India’s Bharat Petroleum Corp. Ltd holding the remaining stake. Brazil’s national oil company, Petrobras SA, is the operator in three of the four blocks.