After the Mumbai bench of the National Company Law Tribunal (NCLT) accepted Vedanta Group’s Twin Star Technologies’ resolution plan for Videocon Industries Ltd, the stock of Videocon Industries jumped 5%. Videocon Industries would be delisted (rejected) under the resolution plan, and Twin Star Technologies would pay Rs 2,962 crore towards Videocon‘s total debt.
Videocon’s lenders had already approved Twin Star Technologies’ proposal in December last year. Vedanta’s stock climbed over 1% to an intraday high of Rs 277.50 on the Bombay Stock Exchange (BSE). The stock has increased by 164 percent in the last year and by 71% since the beginning of this year.
Vedanta is primarily interested in Videocon because of the latter’s 25% share in the Ravva oil field. Vedanta maintains a 22.5 percent investment in Ravva through Cairn, and with this accomplishment, it will increase its position to 47.5 percent, making it the largest shareholder in front of ONGC at 40%. In FY20, the Ravva block produced 14,232 barrels of oil equivalent per day on average (BOEPD). In the first quarter of FY21, it grew to 22,037 BOEPD.
“The aforementioned Resolution Plan, as approved by the CoC, was registered with the NCLT on December 15, 2020, in accordance with Section 30(6) of the Code, for its approval. This is also to inform everyone that on June 8, 2021, the Hon’ble NCLT issued an order approving the Resolution Plan for the Consolidated Corporate Debtors, including the Company, pursuant to Section 31 of the Code” According to the firm.
The permission order has not yet been issued, according to the company, and is now being awaited. Videocon Industries owes banks roughly Rs 31,000 crore in total, including interest. In December 2020, a group of lenders rejected Videocon promoter Venugopal Dhoot’s settlement offer.
The Dhoot family had previously proposed to pay lenders Rs 30,000 crore to settle unpaid liabilities and remove 13 Videocon group entities from insolvency proceedings. Dhoot presented a settlement offer for 13 of the 15 Videocon group firms that are undergoing the Corporate Insolvency Resolution Process together (CIRP).
In December 2017, state-owned lender SBI filed an insolvency petition against Videocon Industries.
Insolvency procedures were then filed against 15 other group firms, with the exception of two, KAIL Ltd and Trend Electronics Ltd, which were left out of the consolidation plan.