In an over 95% haircut to bankers, the Mumbai bench of insolvency tribunal has cleared Vedanta Group arm’s resolution plan to acquire bankrupt conglomerate Videocon Industries.
The National Company Law Tribunal (NCLT) on Tuesday approved a bid by businessman Anil Agarwal-backed Twin Star Technologies to acquire the 13 firms of Videocon Industries Ltd for Rs 2,962 crore.
Financial creditors’ claims worth over Rs 61,773 crore have been admitted under the insolvency processes of the companies that began in June 2018, August 2019 and September 2019.
Claims of Rs 3,165 crore towards operational creditors were also admitted.
The liquidation value is understood to be worth around Rs 2,600 crore.
Under the resolution plan, the equity shares of the company are proposed to be delisted, Videocon Industries said in a filing.
In December last year, a State Bank of India (SBI)-led consortium of bankers approved the resolution plan with a 95.09% voting share.
Besides Twin Star Technologies, as many as 10 prospective resolution applicants including private equity funds and electronic companies such as distressed investor Eight Capital, Kotak group’s private equity arm Kotak Investment Advisors, real estate-focused PE firm Cerestra Advisors, a Micromax arm, and Dixon Technologies submitted expressions of interest.
The NCLT order also means dismissal of Videocon’s former promoter Venugopal Dhoot’s offer to take back control.
Videocon, which is in multiple businesses ranging from oil rigging to consumer durables, was controlled by the Dhoot family before lenders dragged it to the NCLT in 2017.
Dhoot had promised to repay about Rs 33,000 crore over the next few years to take back control of the conglomerate by withdrawing insolvency proceedings under Section 12A of the Insolvency and Bankruptcy Code (IBC).
A household name which makes air-conditioners, refrigerators and home-entertainment systems, Videocon Group was the first Indian company to receive a licence to manufacture colour TVs in 1986.
Later, it entered into oil and gas, telecom, retail and DTH services with increased borrowings that impacted its businesses.