Oct 10, 2013, 12.23 PM IST | Source: CNBC-TV18

Mozambique stake sale will pare debt by Rs 15k cr: Videocon

Speaking to CNBC-TV18, Venugopal Dhoot, chairman and managing director, Videocon says the stake sale will result in a comparatively health balance sheet and good asset cover. The company has Rs 25000 crore worth debt that will come down to Rs 10000 crore post the stake sale.

We are now of the opinion that a liberal dividend should be given because company has been growing extraordinarily well on all the front and especially in oil, we have created a miracle.

Venugopal Dhoot

CMD

Videocon

The Mozambique gas field stake sale will help cut debt by Rs 15000 crore, says Venugopal Dhoot, chairman and managing director, Videocon .

Speaking to CNBC-TV18, Dhoot says the stake sale will result in a comparatively healthy balance sheet and a good asset cover.

Also read: Govt okays OVL-OIL buying 20% stake in Mozambique gas field

“We will have a shareholders meeting and we will do whatever will be decided by the shareholder and our board of directors. It is too early to announce what we will do with our money but one thing is definite that the money will be kept as a fixed deposit in the bank so that our net debt can be reduced substantially,” adds Dhoot.

Below is the edited transcript of Dhoot’s interview to CNBC-TV18.

Q: There is a lot of selling and demerger and activity happening in your group. It is in a public space that you have got Rs 15,000 crore from the Mozambique deal. Can you tell us when the money comes in and what you will do with it?

A: Money will be coming soon maybe in few days. The documentation has been completed, everything has been completed and money is slated to come anytime. We are thinking of keeping this money in bank’s fixed deposit so that our net debt comes down. Videocon is having debt around Rs 25,000 crore. If this Rs 15,000 crore comes in then the net debt will fall to Rs 10,000 crore. With that balance sheet will look very healthy, asset cover will be very good and all ratios will be good.

Q: Will you be retiring debt or will you announce a special dividend ?

A: That is in the hands of my shareholders. We will have a shareholders meeting and we will do whatever will be decided by the shareholder and our board of directors. It is too early to announce what we will do with our money but one thing is definite that the money will be kept as a fixed deposit in the bank so that our net debt can be reduced substantially.

Q: So largely to retire debt and perhaps a small dividend. Is that what you think will be the way you will use the money?

A: Nowadays, all has to be decided by the shareholders and it will be decided in the AGM and accordingly dividend will be given. We are now of the opinion that a liberal dividend should be given because company has been growing extraordinarily well on all the front and especially in oil, we have created a miracle. Therefore, we think our shareholders should also get benefit out of that.

Videocon Ind stock price

On April 16, 2014, at 15:44 hrs Videocon Industries was quoting at Rs 169.90, down Rs 6.9, or 3.9 percent. The 52-week high of the share was Rs 232.00 and the 52-week low was Rs 153.00.


The latest book value of the company is Rs 316.93 per share. At current value, the price-to-book value of the company was 0.54.

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