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Last Updated : Sep 20, 2018 11:52 AM IST | Source: Moneycontrol.com

Videocon auction: Banks may appoint common financial advisor

The proposal was discussed by all the lenders, led by State Bank of India, in a meeting on September 17 where many stakeholders gave inputs as to how this process can be made simpler

 
 
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Lenders to consumer electronics major Videocon may appoint a common financial advisor for the auction process for 15 of its group companies against which they have initiated bankruptcy proceedings, sources told The Economic Times.

The banks want to run a coordinated auction process to ensure that the timeline for circulation of proposals to prospective buyers and the receipt of final bids and resolution plans remain the same for all the entities on the block.

Many of Videocon's group companies have inter-linked operations, which is why it would be easy for bidders to submit combined bids for a group of entities rather than different plans for each, sources told the newspaper.

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Lenders are trying to avoid an Amtek Auto-like situation where bidders had to submit a separate resolution plan for all entities with linked operations, which ultimately delayed the whole process, a banking official was quoted as saying.

The proposal was discussed by all the lenders, led by State Bank of India, in a meeting on September 17 where many stakeholders gave inputs as to how this process can be made simpler. Legal advisors and resolution professionals were also present at the meeting.

Insolvency courts have admitted petitions for many entities of the Videocon Group but orders have been reserved in some cases where the promoter's arguments are still being heard.

Banks have already submitted proofs of claims against the companies and are now waiting for the formal process to begin. Once that happens, the lenders can proceed with valuation of the assets to be sold and appoint due diligence experts wherever necessary.

Videocon has split up its core electronics business into smaller entities, each of which deal with a different aspect of the larger business. Some of them are involved in manufacturing, some are responsible for distribution and sales, while others own various brands.

The company is one of the 28 defaulters identified by the Reserve Bank of India against which insolvency proceedings can be initiated.

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First Published on Sep 20, 2018 11:52 am
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