Lenders may consider fresh bids for Videocon

In a new twist to the resolution of the bankrupt Videocon Group, its Committee of Creditors (CoC) may consider dissenting lenders’ plea for fresh bids for the group.

Successful applicant
Twin Star Technologies, a Vedanta Group company, had emerged as the successful resolution applicant (SRA) for the Videocon Group, comprising 13 companies, at a payout of only about 4.89 per cent for assenting financial creditors and 4.56 per cent for dissenting financial creditors.

Bank of Maharashtra and IFCI had contested the low payout (or huge hair cut) in the National Company Law Appellate Tribunal.

Videocon Group has varied business interests and a presence in segments such as oil and gas assets, consumer electronics and home appliances.

Total claims
Out of the lenders’ total claim amount of ₹71,434 crore, claims admitted in the National Company Law Tribunal (NCLT) were for ₹64,839 crore.

The SRA’s resolution plan has been approved for only ₹ 2,962 crore, which is just 4.15 per cent of the total outstanding claim amount and the total hair cut to all the creditors is 95.85 per cent.

The resolution plan had come in for lot of criticism due to the steep hair cut taken by banks and loss of depositors’ money.

Authority’s observation
The NCLAT, in an earlier order, referred to the Adjudicating Authority’s observations that: “It is argued that it is matter of concern that the corporate debtors in the consolidated proceedings had cash of ₹200 crore and the SRA would bring in just ₹262 crore and from that also first payment of ₹200 crore will be brought in 25 months.

“Beyond ₹262 crore, the rest was being brought in only by way of NCDs to be paid in six years.” The Hindu BusinessLine