The Videocon group has put the blame for massive Rs 39,000 crore debt on Prime Minister Narendra Modi's demonetization move. In an exchange filing on Tuesday, Videocon said that the demonetization drive chocked supplies for making cathode ray tube (CRT) televisions and forced the firm to end business. Besides the Modi govt's policy, the consumer appliances maker also blamed Brazilian government's red tapism. Videocon said that its oil and gas business got entangled in tedious paper work in Brazil.
The group has also said that its telecommunications unit witnessed losses after the country's apex Court canceled licenses.
Earlier last week, the NCLT on Wednesday admitted Videocon Industries under the Insolvency and Bankruptcy Code, and the debt-ridden firm is hopeful that its lenders will be able to recover up to 80 per cent of the Rs 20,000-crore debt.
The company in April had approached the principal bench of the National Company Law Tribunal (NCLT) requesting it to direct all insolvency cases filed by its lenders to be heard together. Confirming the NCLT admission, Videocon Industries' chairman Venugopal Dhoot told PTI, "We hope that the banks will recover nearly 70-80 per cent of total loan of Rs 20,000 crore. We would like to have a situation where the entire process is seamless and within the stipulated time frame of 180 days."
Hoping that the working capital requirement is addressed at the earliest, Dhoot said, "The brand Videocon continues to be a respected trademark and promoters will help them in projecting the brand." "We would like the IRP (insolvency resolution professional) to take care of the interest of all our creditors and other stakeholders in the best possible way. We will extend our full cooperation," he added. Dhoot said the company has substantial assets, including interests in oil assets abroad, and the uptrend in crude prices bodes well for the group. NCLT today also announced that Anuj Jain of KPMG will be the interim resolution professional for the case. Jain will have 180 days to turn around the company, with an option to extend the timeline by 90 days, failing which the firm will have to go for liquidation.
Videocon's shares, which nosedived 96 per cent over the last five years, traded at Rs 7.65 on the BSE on Tuesday.