According to two bankers familiar with the situation, lenders to Videocon group's energy business have extended the deadline for presenting the resolution plan until September 30th after receiving no bids from possible applicants.
Videocon Oil Ventures Ltd. (VOVL), which extracts oil and gas through worldwide subsidiaries, has received expressions of interest for its abroad assets from four corporations, including Vedanta and Petrobras of Brazil.
“At this time, we have not received any bids. The deadline has now been extended for over a year. "The lenders have decided to extend the timeline further because they believe liquidation will not fetch any value," said the first banker knowledgeable of the situation.
The delay in the resolution of VOVL adds to the miseries of lenders waiting for the National Company Law Appellate Tribunal's (NCLAT) ruling on Videocon's debt resolution process.
Last month, the Supreme Court refused to overturn the NCLAT's stay order on Vedanta Group's Twin Star Technologies acquisition of Videocon Group. NCLAT was given till 7 September to make a final judgement on the case. The decision by the NCLAT to halt the debt settlement process was based on an appeal by the Bank of Maharashtra, which claimed that the Twin Star bid was too near to the liquidation value.
In late 2016, the Reserve Bank of India referred Videocon to bankruptcy as one of the first 12 largest accounts. VOVL was admitted separately in 2019 and is not a part of Videocon Group's corporate insolvency proceedings. The company is backed by a corporate guarantee worth 24,000 crore from Videocon Industries Ltd., which has a debt of over 30,000 crore.
Videocon Hydrocarbon Holdings Ltd (VHHL), a Cayman Islands corporation founded in 2009 to manage the Videocon group's global oil and gas assets, is owned by VOVL. VHHL, in turn, owns 100% of the equity shares in Videocon Energy Brazil Ltd. (VEBL), a 50% joint venture partner in IBV Brasil Petróleo Ltd. VHHL own 100 percent of Videocon Indonesia Nunukan Inc.’s equity shares. VOVL and IBV were provided credit facilities by the lenders; however they have now become non-performing assets.