The lenders plan to recover at least 50-55 percent, or Rs 230-300 crore, of the total loan value of Rs 450 crore that had been lent to VOVL
A consortium of lenders led by the State Bank of India (SBI) has sought expressions of interest (EoIs) from companies to buy oil and gas assets of VOVL (Videocon Oil Ventures) in Brazil, Indonesia, and East Timor, Mint reported.
The lenders plan to recover at least 50-55 percent, or Rs 230-300 crore, of the total loan value of Rs 450 crore lent to VOVL, two bankers aware of the development told the paper.
The consortium of 17 banks includes Bank of India, Export-Import (Exim) Bank of India, Central Bank of India, IDBI Bank, ICICI Bank and Union Bank of India. The lenders had advanced credit facilities to VOVL and its offshore subsidiary IBV Brasil Petroleo, which has turned a non-performing asset (NPA).
"SBICAP (SBI Capital Markets) has been appointed as process adviser by a consortium of lenders led by State Bank of India, to identify firms having adequate capability for undertaking the monetisation of upstream oil and gas assets located in South America and South East Asia of offshore subsidiaries of an Indian Company," SBICAP said in a notification on its website.
SBI expects to complete the monetisation in a year’s time, one of the two bankers told the paper.
"In 2020, the final investment decision is likely and once that is done, the value of the project increases significantly. The value increases and other buyers might be interested and might offer a good value. We are hoping to recover our money," the second banker said.
The company has a total debt of Rs 1,189.40 crore as of 31 March 2016, according to the registrar of companies (RoC) filings. This is part of the consolidated debt of the Videocon Group, which stood at Rs 44,000 crore as of July 2017.
On August 29, the consortium had sought more time from the Reserve Bank of India (RBI) to restructure the debt of VOVL. The firm is one of the 32 NPA accounts falling under the purview of the RBI’s 12 February circular, which asked banks to put in place a resolution plan within 180 days of the first default.VOVL, which was founded in 2011, is engaged in the extraction of oil and gas through its subsidiaries incorporated across the globe.