Venugopal Dhoot, the promoter of bankrupt Videocon Industries, has offered to pay Rs 31,289 crore to lenders over 15-18 years if they agree to pull the group’s companies from the Insolvency and Bankruptcy Code.
CNBC-TV18 has seen a copy of the proposal but bankers said they were not included to consider the proposal given the long timeframe sought by Dhoot.
Banks have received as many as 11 proposals from various suitors for the company as per the last round of bidding which ended in August.
However, none of the offers are seen as strong, and lenders are hopeful of renegotiating them higher over the course of the next few weeks, senior bankers in the know told CNBC-TV18.With the offers on the table being generally poor, bankers said they have even considered the possibility of liquidation, but will first evaluate all offers, including the one from the promoters, before taking a final call on the matter by November end, said one of the people quoted earlier.
Venugopal Dhoot Proposal by CNBCTV18 Digital on Scribd
Dhoot was the Chairman and Managing Director of the suspended board of Videocon Industries. The company's board was suspended following initiation of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).
The settlement offer has been made for 13 out of the 15 Videocon group companies that are currently under CIRP. Two group companies -- KAIL and TREND -- are not covered under the offer. The Mumbai bench of NCLT has clubbed the 15 group companies together to speed up the resolution process as well as ensure better value.
"I expect the final decision to be taken within the next 30 to 60 days," Dhoot said. Under Section 12A of the IBC, the tribunal can permit withdrawal of an ongoing insolvency process against a company subject to certain conditions.
The resolution professional concerned has to move a proposal for withdrawal of insolvency process with the approval of 90 percent members having voting rights in the Committee of Creditors (CoC).
Dhoot said the latest proposal under Section 12A is similar to the one which was made in October 2017 and approved by Joint Lenders' Forum and recommended to the Reserve Bank of India.
"As per our original proposal of October 2017, the total debt for which restructuring was considered was for Rs 31,289 crores ie. without any haircut in the original proposal," he said. In 2017, the proposal was rejected and the banks moved the tribunal to initiate CIRP.
Dhoot's latest proposal has considered the entire amount of Rs 31,289 crore including unpaid interest up to December 31, 2020.
"This proposal follows the general principle of IBC stated by Supreme Court primarily focusing on GEM ie. Going Concern, Employment and Maximising Value to all the stakeholders," he said.
Generally, only few 12A applications get requisite approvals, However, Dhoot said he was confident of the proposal and said around 150 companies have successfully withdrawn under Section 12A from insolvenvcy process.
"Our proposal is robust and outlines the capabilities of not only servicing the debt but also regaining the lost glory of Videocon. It is explicitly placed that we have not sought any haircut from the original accepted and recommended the proposal of 2017," he said.
Without divulging specific details about the proposal, Dhoot said it envisages payment of loans from its flagship consumer electronics and home appliances business. Dhoot said that he has a "robust business plan" in order to regain the image of the Videocon brand and its market share."The consumer market in India is growing by the day. Videocon will play a pivotal role in addressing the growing market across consumer durables segments," he said, adding that Videocon will also be a key player in the OEM (Original Equipment Manufacturer) segment for foreign brands. "The group has plans to monetise assets as well as enter into the affordable housing business."