Confident of repaying banks; it's only a question of time: Videocon

A: Company is having domestic and foreign debt together is only Rs 20,000 crore on Videocon International Limited. We have got another company, sister company Videocon Hydrocarbon Limited which is registered abroad and that company is having Rs 22,000 crore loan, but that loan has been taken from foreign banks. Indian banks has nothing to do with that and even Reserve Bank of India (RBI) has nothing to do there. So, only Rs 19,000 crore loan is taken from Indian bank is in question.

Latha: Just before I came into the interview I was speaking to State Bank of India (SBI) they gave me a figure of close to Rs 50,000 crore and they said half of it is international as you said and half of it is Indian. So, is it is little more than Rs 20,000 crore if you add it all the working capital that is what the bankers say?

A: You see the foreign loan is given by foreign banks and not by Indian banks and that loan is separate. That is in a separate company. So, what resolution they require is only for Rs 20,000 crore.

Latha: Not Rs 24,000 or 25,000 only Rs 20,000?

A: Yes. Rs 20,000 crore resolution has been put by the SBI; working capital is not default. Working capital loan is not under default and no problem is there.

Latha: Even the foreign debt some of it has been given by Indian banks we understand?

A: No, foreign loan has been given by various banks like Deutsche Bank, Bank of England, Bank of America and Standard Chartered Bank, most of majority of loan has been given by them only. Indian bank has got very small loan over there which was taken initially. Since oilfields has been doing very well there is no question of default over there.

Latha: You mean you have been paying all the foreign loan interest?

A: Foreign loan interest has been paid, you see foreign loan is a project loan and project loan interest is provided by the bank only so there is no question of default in the foreign loan.

Sonia: That is a foreign loan, but we are more interested in with what is happening with the Indian loan at the moment that Rs 20,000 crore that you spoke about? What are the haircuts that the bankers will have to take because of the insolvency?

A: Well, when I am there, I am quite sure banks will not be required to take any haircut. Because our brand is very valuable, we are having properties worth around Rs 7,000 crore and we are having lot of other assets also. So, I don’t think banks will have to take any haircut in our case and we will also try our level best.

Latha: How can you be in charge under the NCLT the existing promoters are not allowed to buy?

A: We will not be taking, we will be supporting them that other should buy. For example, team led by State Bank of India visited Electrolux and all those people and they are also trying to sell it. Do you know this that NCLT order has not been passed till now. The company is with us only. We have gone to High Court also.

Nisha: Coming to that point, first is of course you have challenged the lenders and you have taken it to NCLT, you don’t want to be in the Insolvency and Bankruptcy Code (IBC), so if you are challenging that and you are going to go to the Highest court so that you are still in control of your companies, what is your plan B in terms of recovering the funds to pay back the lenders? Which are the assets if you can pinpoint, of course there have been several news point, several transactions that have been announced including Kenstar, Dish TV and many other, so if you can lay down your strategy in terms of repaying the debt to the lenders by selling the valuable assets that you just mentioned?

A: You will understand that Videocon as a going concern with a brand and all other sub brand has got a tremendous value and it has got a largest market share in India. So, there should be many more interest coming over here for this company and we are trying that under any circumstances our banks should not have any haircut. That is our intention, because we think that there is no fault from our side. Our telecom license has been cancelled and that is why we came into this position. But we don’t want bank to make any loss.

Latha: On what point have you taken the banks to the High Court?

A: We wanted that our project report is good and our proposal was good and there was no necessary to refer it to NCLT and they can take it again because we have our plan to repay all of our money to the bank. So on this point we have gone and we are quite hopeful that we will be able to convince banks also and the court also that we are solvent company.

Sonia: Are there any interested buyers in any of your assets at the moment?

A: We have got lot of properties, there are interest for buyers for that also. As a going concern for Videocon there are many buyers. I will tell you all of the bankers led by State Bank of India visited various places abroad to search for the buyer and they have also got a very hood response. So, I am quite hopeful that this going concern business of Videocon will have a very big value.

Nisha: Let us take it one by one – the Dish TV merger plan had been announced that could be really making it to a listed merged entity very soon now that you have got all the proposals. Is there a plan for Videocon to sell their stake in the merged entity to Dish TV, recover some funds out of that and then could that be utilised to repay debt to the banks?

A: You see merger has not taken place yet and after merger will take place we will decide what to do but about merger etc. the authority to talk with Dish management and we don’t know anything on that. But merger will take place very soon in 4-5 days’ time that is what we think. Then we will decide what to do in future.

Sonia: There are other group companies liabilities that you have to repay as well, right? What amount is that exactly? Is it about Rs 5,000-6,000 crore?

A: Which is that?

Sonia: The other group companies liabilities that you have to repay?

A: Group companies – total liability is Rs 20,000 crore only. Total liability of banks in India is only Rs 20,000 crore.

Latha: What is the progress on the international oil reserves, are you able to start prospecting oil, can you give us a timeline on when you will be able to draw oil and make profits over there?

A: We are quite sure from next year we will start the oil production. We will be able to pay all the money borrowed from oilfield to the bank as it starts production and it has got huge oil. It is one of the largest oil reserve in the world. So, there is no problem for us. To get lot of money out of it at USD 65 it is very viable proposal.

Latha: When is the next hearing in the High Court?

A: That I don’t remember, I can’t say when it will be. Next date has not been given.

Sonia: By when can we expect the company to come out of NCLT?

A: That depends on the court decision and all, because the matter is sub judice I will not talk on that matter.

Sonia: Ask you about the possibility of Everstone Group acquiring Kenstar I mean there was a lot of talk that Everstone was looking to acquire Kenstar, anything that has come up on that front? Any kind of timeline that we are looking at?

A: As you know when we sell any asset, any brand, anything there is non-disclosure agreement (NDA) and that non-disclosure agreement are very strict, so I would not like to speak on that who is the buyer, who will buy and when they will buy.

Latha: For what all assets do you have buyers, since you have taken the banks to the High Court saying that you can pay them back who are the buyers who have expressed interest and on which assets?

A: We can say that we have got a Videocon brand and with other brand we are having a going concern business and this going concern has got a great value and we can pay money to the bank. Apart from that we are having Rs 7,000 crore worth of properties and looking at all these things we will be able to pay to the bank their loan. Only think is that it is a question of time only.

Latha: What about the insurance arm, how much did you get for the sale?

A: That still has to be decided.

Latha: But you have sold it off, right?

A: There is a formula, formula we are working and we have got a permission to sell from Insurance Regulatory and Development Authority (IRDA) to sell the insurance company.

Latha: Are you selling it to Diamond Deal Trade Limited, it was one of those group companies of Jindal Group and Enam Securities which were wanting to buy?

A: Yes. Price etc. will be decided and the name what you have said is – that I can’t give you just now. Negotiations are going on.

Sonia: What about Kelvinator, the business was expected to be sold, right? Anything on that front that we can expect anytime soon?

A: Kelvinator has been doing very well and it was never expected to be sold. It is doing very well.

Latha: You are expecting to get the Insolvency Resolution Professional (IRP) announcement on March 28th, right? That is the next hearing in NCLT?

A: We don’t predict about what Court will do and what Court will not do, I can’t predict that.

Latha: Since when are you an NPA, I think Dena Bank called you an NPA about one year ago? You have not been servicing interest for the past 9 or 12 months?

A: No, there has been a formula decided by the State Bank of India which we are stilling paying the interest. 7 percent of our revenues goes to the interest account and we are paying the interest.

For full interview, watch accompanying video...