• Tue. Oct 19th, 2021

Videocon Insolvency: Dhoot family offers to pay 30,000 crore rupees to settle outstanding debt

ByDiane A. Gomez

May 7, 2021

NEW DELHI: The Dhoot family have offered to pay 30,000 crore rupees to lenders to settle their outstanding loans and remove 13 Videocon group companies from insolvency proceedings. A proposal for payment of the amount has been forwarded to Videocon Industries’ Creditors Committee (CoC), Venugopal Dhoot said.

Venugopal Dhoot was Chairman and CEO of the suspended Board of Directors of Videocon Industries. The company’s board of directors has been suspended following the launch of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

The Dhoot family – once promoters of the group – expect a final decision on the settlement offer by the end of this year, provided the lenders and the National Company Law Tribunal (NCLT) agree.

The settlement offer was made for 13 of the 15 companies in the Videocon group currently under CIRP. Two group companies – KAIL and TREND – are not covered by the offer.

NCLT’s Mumbai bench brought together the group’s 15 companies to speed up the resolution process and ensure better value.

“I expect the final decision to be made within the next 30 to 60 days,” Dhoot said.

Under Article 12A of the IBC, the court may authorize the withdrawal of an insolvency proceeding pending against a company under certain conditions.

The relevant resolution professional must present a proposal to withdraw from insolvency proceedings with the approval of 90 percent of the voting members of the Creditors Committee (CoC).

Dhoot said the latest proposal under Section 12A is similar to the one made in October 2017 and approved by the Joint Lenders’ Forum and recommended to the Reserve Bank of India.

“As per our original proposal of October 2017, the total debt for which restructuring was considered was Rs 31,289 crore, i.e. without any discount in the original proposal,” he said. declared.

In 2017, the proposal was rejected and the banks asked the court to initiate the CIRP.

Dhoot’s latest proposal took into account the total amount of Rs 31,289 crore, including unpaid interest until December 31, 2020.

“This proposal follows the general principle of the IBC enunciated by the Supreme Court by focusing primarily on GEM, that is, the continuity of operations, employment and maximization of value for all parties. stakeholders, ”he said.

Typically, only a few 12A applications get the required approvals. However, Dhoot is confident in the proposal and said around 150 companies have successfully opted out under Section 12A of the insolvency process.

“Our proposal is solid and outlines the capabilities not only to repay the debt, but also to regain the lost glory of Videocon. It is explicitly stated that we did not ask for any discount to the original accepted and recommended proposal of 2017” , did he declare.

Without disclosing specific details of the proposal, Dhoot said he was considering paying off loans from his flagship consumer electronics and home appliance company.

Dhoot said it has a “robust business plan” to regain the image of the Videocon brand and its market share.

“The consumer market in India is growing day by day. Videocon will play a central role in responding to the growing market of durable consumer goods segments,” he said, adding that Videocon will also be a player. key in the OEM (Original Equipment Manufacturer) segment. for foreign brands.

The group intends to monetize its assets and enter the affordable housing sector.

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