Videocon: Selling assets to repay debt

Videocon stock fell by another 10% on Wednesday, after falling 36% early this week

The Videocon stock fell by another 10 per cent on Wednesday, after falling 36 per cent early this week. The share price has been falling on rising concerns over debt repayment issues. Recently, Dena Bank had tagged the firm a non-performing asset, and there are news reports suggesting other banks are considering a similar move. The company is taking steps to cut its debt, worth Rs 22,000 crore, to Indian banks. It owes another Rs 22,000 crore to foreign banks, serviced by its foreign assets; there is no default on overseas loans. The group has sold several assets in the past three years to meet its commitments and plans to sell more. Here are its assets which are on the block or have already been sold: 

Kenstar consumer business  

The company has put its Kenstar consumer goods business and brand on sale and, according to insiders, 20 companies have made a bid for the business, which sells home appliances. It could fetch around Rs 2,000 crore for the firm, sources say 

DTH business  

The direct-to-home TV business is being merged with Dish TV, creating India’s No. 1 satellite TV company. The promoters of Videocon will receive shares in the merged entity. On Tuesday, the Competition Commission of India cleared the merger proposal by both companies. In 2014, the satellite TV business was listed on Nasdaq and the group raised $300 million

Land bank 

The group has funds blocked in power and coal businesses, which have 1,500 acres in Madhya Pradesh and another 700 acres in Chhattisgarh, with all related infrastructure. The group will sell part of this land bank. Its headquarters in Fort, Mumbai, is already sold for Rs 300 crore

Insurance JV 

The group owns majority stake in a general insurance venture with Liberty Mutual of United States. It plans to reduce its stake at a valuation of Rs 5,000 crore 

Overseas oil blocks 

The group has oil and gas fields in Indonesia and Brazil, which the company claims are valued at $12 billion. Of this, the Indonesian block is likely to start production late next year or early 2019, while the Brazilian fields are estimated to produce its first oil in 2020. The group plans to use the profits from its share of oil in the field to repay domestic debt

Mozambique field 

In 2013, Videocon sold its Mozambique gas field for $2.5 billion. The proceeds were used to repay bank loans in India and abroad

Spectrum  

In March last year, the company sold spectrum to Bharti Airtel for Rs 4,428 crore.  The company used the funds to repay Indian bank loans. In the past six years, the company has paid Rs 26,000 crore in interest to banks. The company said it fell into bad times due to cancellation of telecom licences by the Supreme Court in 2012