Videocon Industries Ltd (VIL) is renegotiating repayment of its Rs22,100 crore debt with a consortium of 17 Indian banks, says a report.
According to a report from DNA Money
, the stressed consumer electronics-to-energy group is seeking extension by five years for its loan repayment period so that it can unload its assets to cut debt. VIL has not requested for any 'haircut' on interest payments.
Venugopal Dhoot, chairman of Videocon Industries, told DNA Money, "We are not asking for any interest waivers. We are only requesting banks to delay the repayment of the dues by five years. The stock price will bounce back after the initial panic as the company is backed by strong underlying assets."
Videocon has a debt of about Rs43,100 crore. "VIL owes Rs22,100 crore to the domestic banks while the remaining debt of Rs21,000 crore is from foreign banks like Bank of America and Standard Chartered. The loan is extended to VIL's subsidiary, Videocon Hydrocarbon Holdings Ltd. This portion of the loan cannot become stressed as we have a huge oil field asset to service it. If you look at our results, we reported operational profit but landed up in losses due to the interest payment burden, which is about Rs2,500 crore annually," Mr Dhoot told the newspaper.
Quoting a senior banker, the report says, "The company has asked for a relaxation in the repayment period until the time assets are sold and cash flows are comfortable. The company claims that the fall in oil prices are hurting its cash flows."
VIL has been offloading various assets to repay its debt. The group's headquarters, an iconic heritage building in the Fort area of Mumbai, was recently sold for Rs300 crore. Only one floor measuring 20,000 square feet has been retained, which continues to be VIL's head office. In March last year, the company sold spectrum to Bharti Airtel for Rs4,428 crore. Earlier, in 2013, the group had sold its Mozambique gas field for $2.5 billion, the report says.
Last month, Videocon informed stock exchanges that it proposes to sell its entire 51.32% stake in Liberty Videocon General Insurance Co Ltd to Diamond Delatrade Ltd from the DP Jindal Group (26%) and Enam Securities Pvt Ltd (25.32%).
Separately, the company has dismissed as 'baseless' some reports about raids on its offices. In a regulatory clarification, it said, "Videocon categorically asserts there is no substance to rumours that the company's office have been raided by any investigating agency. The contention of the said reports regarding Chairman Venugopal Dhoot is totally false and malicious."
Videocon closed 3.33% down at Rs12.7 on the BSE, while the benchmark Sensex ended Thursday marginally higher at 33,351.