Lenders seek more time from RBI to restructure VOVL’S debt

Lenders led by State Bank of India (SBI) are seeking dispensation from the Reserve Bank of India (RBI) to restructure the debt of VOVL Ltd, formerly known as Videocon Oil Ventures Ltd, according to three people aware of the matter.

VOVL is one of the 32 large accounts falling under the purview of the RBI’S February 12 circular, which asked banks to put in place a resolution plan within 180 days of the first default.

The 180-day period for all loans defaulted as on March 1 ended on Monday. The RBI has directed that lenders who fail to resolve these accounts within the time-period, to refer these cases to the National Company Law Tribunal (NCLT) for initiating bankruptcy proceedings.

“VOVL is currently classified as a non-performing asset with all banks as it has failed to commence commercial operations,” said a senior official with a public sector bank.

As per the RBI guidelines, loans given to infrastructure projects will be classified as NPAS if they fail to commence commercial operations within two years from the original date.

The Videocon group, in an earlier interaction with Mint, had said that it has extended a deadline to start production from its oil and gas fields because of a fall in oil prices. The company along with its consortium partners had plans to begin production from its fields in Brazil and Indonesia by 2019, which has now been postponed to 2021.

“Lenders are looking to give more time to the company to repay their outstanding dues and also give additional funding for maintenance of the project,” said the bankers mentioned earlier. “We want to avoid taking the company to NCLT as it could lead to cancellation of the contract with its Brazilian partner,” they added.

VOVL, which was founded in 2011, is engaged in extraction of oil and gas through its subsidiaries incorporated across the globe.