Videocon Industries has said it has discovered hydrocarbons in the Tarakan basin of Indonesia. In an interview with CNBC-TV18, Venugopal Dhoot, CMD, Videocon gave his perspective on the oil findings off the Indonesian coast.
Videocon Industries has said it has discovered hydrocarbons in the Tarakan basin of Indonesia. Last month too, it had announced a gas find in a second well in Mozambique in Africa and another find in Brazil.
The diversified group said it has appointed merchant bankers ICICI Securities and Morgan Stanley to help unlock value from its oil and gas assets through an initial public offering or demerger, Venugopal Dhoot, CMD, Videocon told CNBC-TV18.
In an interview with CNBC-TV18, Venugopal Dhoot, CMD, Videocon gave his perspective on the oil findings off the Indonesian coast.
Below is a verbatim transcript. Also watch the accompanying video.
Q: Can you give us some more clarity on what exactly was discovered off the coast of Indonesia? What is this company, how much stake do you own?
A: This information has been provided to us by our operator Anadarko and this discovery is in Indonesia Tarakan Basin of Indonesia and at 133 feet the oil and gas has been discovered.
Videocon has been partner with BPCL. We are having 12.5%, BPCL is having 12.5%, Anadarko 35%, and PT Medco 40%. We have got substantially big oil finding in Indonesia. As already told to you we got a huge finding in Brazil a week or two back, a world level finding in Mozambique also, two big findings in gas. Those are also the largest discoveries of the year in Africa.
So Videocon has been very successful in getting oil wherever they are going, and now Indonesia has been another place where we have got oil. With this we think that Videocon's oil portfolio across the globe is increasing.
Q: We would be grateful if you can add some numbers to what you are saying and exactly what you have hit, have you hit gas, have you hit oil, what kind of hydrocarbon it is. More importantly when will you be unlocking this oil and gas value. Do we expect a demerger of this oil and gas segment anytime soon, will you take it to the market in the form of an IPO, if so when?
A: This oil has been a major finding for Videocon. The Indonesian oil also that features Anadarko is working, and hopefully it is also one of the biggest oil finding by Anadarko in Indonesia. It will be ready and working in 15 or 20 days' time.
This is always for a good company, good corporate to give its rewards to the shareholder and we have been giving it. We have appointed our merchant banker, ICICI and what they decide accordingly we will take the decision in this matter very soon.
Q: Any indication whether it would be an IPO or maybe you would go for value unlocking via this stake sale method and any timeline?
A: These are the methods which you have said and one of the methods our merchant banker will suggest us. On the timeline I cannot say because these things take time because huge assets are involved.
Q: How much are you comfortable offloading then?
A: We always see that whatever we get as a company, our shareholder gets the benefit out of that. At an appropriate time we will announce that.
Q: Merchant Bankers – it is only ICICI that has been appointed or is it ICICI Securities, who is your merchant banker?
A: ICICI Securities and also there are foreign merchant banker also – Morgan Stanley is also there. They are working on that.
Q: Do you have any initial idea of what may be the valuation that you can expect for your entire oil and gas segment?
A: We have got a very large expectation and Anadarko is also very jubilant. But exact valuation will be available when the report from DM comes, who are the world valuators. When that comes then we will be in a better position to say because our valuation and their valuation should not be a huge difference. But we are very jubilant on these fields.
Q: Should we expect an IPO or a demerger before the current financial year is out by March 31?
A: I cannot say now but at appropriate time I will come back to you and tell you.
Videocon Ind stock price
On May 29, 2015, Videocon Industries closed at Rs 148.30, up Rs 1.00, or 0.68 percent. The 52-week high of the share was Rs 211.05 and the 52-week low was Rs 143.00.
The company's trailing 12-month (TTM) EPS was at Rs 1.21 per share as per the quarter ended March 2015. The stock's price-to-earnings (P/E) ratio was 122.56. The latest book value of the company is Rs 302.62 per share. At current value, the price-to-book value of the company is 0.49.
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