BPL's debt legacy expected to wind down by 2011 end

The debt legacy of BPL Ltd is expected to be over by end of 2011. The company, which was one of leading consumer electronics company in India, had kickstarted its close to Rs 400 crore debt settlement process nearly three years ago when Deutsche Bank had consolidated it from a consortium of lenders

Deutsche Bank after waiting for nearly two years and with no signs of debt being settled had taken BPL's vast land bank of close to 400 acres under its possession through the Securitisation Act and has been selling the land to get the debt back.

This process had picked up pace during early this year when Deutsche Bank sold off as much as 300 acres and got back close to Rs 160 crore. The rest of around Rs 120 crore is expected to be raised by end of 2011 when Deutsche Bank is expected to sell off another 50 acres of land. A senior investment banker who is close to Deutsche Bank told Business Standard that with the markets being volatile now, Deutsche Bank may have to a little longer as they may have some problems in disposing off rest of the land bank.

BPL, once the showpiece of Indian consumer electronic sector, was done in by ambitious backward integration at a time when the Korean majors such as Samsung & LG was starting their onslaught in India. BPL just couldnt match up to the pricing power of the Korean majors and with debt looming large, the company was forced to be marginal player in the market. BPL's joint venture with Sanyo too did not play out as expected and eventually the JV was called off even as Sanyo had their problems back home in Japan.

BPL, post the exit from its core business is now focussing on medical equipment business such as ECG machines, in addition building up presence in the renewable energy segment. The company is also trying to put up a 600 MW thermal power project in Andhra Pradesh at a cost of around Rs 2,500 crore for which it is scouting for partners who can bring in strategic value.

Even as these businesses are growing slowly, BPL has in the recent past severed ties with US-based Welch Allyn, a global player in medical equipment.

"The business was growing slowly and many doctors were not trained enough to use those equipments. Our focus is on the tertiary healthcare sector and we are looking to making the frontline equipments easier for para-medics to use," noted a senior official of BPL.