Vedanta slips on buzz NCLAT stays NCLT nod for Videocon takeover

Vedanta fell 3.13% to Rs 256.60 amid buzz that the NCLAT has stayed NCLT's nod for takeover of Videocon by Vedanta group's Twin Star Technologies.

According to media reports, the National Company Law Appellate (NCLAT) has ordered status quo to be maintained in the insolvency case of Videocon Industries Limited, thereby staying the approval granted to Vedanta group's Twin Star Technologies by the Mumbai Bench of the National Company Law Tribunal (NCLT).

Hearing an appeal filed by Bank of Maharashtra, a two member bench headed by officiating NCLAT chairperson Justice A I S Cheema reportedly said that since concerns had been raised that Twin Star Technologies, the successful resolution applicant would bring in just Rs 262 crore and from that also first payment of Rs 200 crore will be brought in 25 months, the status quo should be maintained.

The matter will be next heard on September 7 and till then the resolution professional would continue to manage the company as per the provisions of the Insolvency and Bankruptcy Code (IBC), the NCLAT reportedly said in its order.

Earlier in June 2021, the NCLT approved the resolution plan of Twin Star Technologies, a Vedanta Group company. While approving the plan, the NCLT had reportedly raised questions about Vedanta group company' Rs 2,962 crore bid for 13 Videocon group companies, reportedly noting that the applicant was paying almost nothing.

In December 2020, the Committee of Creditors (CoC) of Videocon had approved the resolution plan submitted by Twin Star Technologies with 95.09% votes. The plan was then filed for NCLT approval on 15 December 2020.

"NCLT has pronounced the order on June 8, 2021 approving the resolution plan for the consolidated corporate debtors, including the company, under Section 31 of the Code (Approval Order)," Videocon Industries had said. "As per the terms of the resolution plan, Videocon Industries will be delisted," it added.

Videocon Group, with interests in consumer appliances and oil, was reportedly pushed into bankruptcy in 2017 after it defaulted on loans. The company's financial creditors had filed claims of Rs 59,452 crore, of which claims worth Rs 57,444 crore were admitted, as on 12 November 2018.

The Videocon Group comprises other assets, apart from its core consumer durables manufacturing unit, including a venture in the telecommunications sector. With the court's approval, lenders had reportedly clubbed the 13 entities of the Group together for faster resolution.

Its erstwhile promoter, the Dhoot family, had reportedly offered to clear the loans in a bid to pull the 13 companies out of bankruptcy proceedings. But the lenders turned down the Dhoots' proposal and chose Twin Star's bid for Videocon, reports suggested.

Videocon Industries holds 25% stake in the Ravva oil field, in which Vedanta, through Cairn India, holds 22.5% shareholding. The acquisition may help Vedanta pick up additional stake in the oil field. Cairn India was merged with Vedanta in 2018. Public sector company ONGC holds 40% in the Ravva oil field.

Vedanta, a subsidiary of Vedanta Resources, is one of the world's leading oil & gas and metals company with significant operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, and aluminium & power across India, South Africa, Namibia, and Australia.

On a consolidated basis, Vedanta reported a net profit to Rs 7,629 crore in Q4 FY21 as compared to a net loss of Rs 12,083 crore in Q4 FY20. Net sales increased by 42.8% YoY to Rs 27,874 crore during the quarter.

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