Videocon’s Venugopal Dhoot says that they are planning to raise the money from consumer electronics, home appliances business, affordable housing and monetisation of assets. Videocon had over 15,000 retailers, over 30,000 direct and indirect employees and over 20 crore customers using wide range of products. “We can liquidate the success story of Videocon, bequest image of the brand, market share and growth” he says.
Videocon Industries along with 14 other group companies are already under insolvency proceedings. RBI referred the Videocon Group’s case to the National Company Law Tribunal, Mumbai Bench to recover the total debt of Rs. 31,289 crore.
Committee of Creditors is likely to decide within a week on Videocon Industries promoter Venugopal Dhoot's offer of Rs 31,289 crore for withdrawal of insolvency proceedings against 15 of group companies, the question that will remain in creditors' mind is how he would fund this offer. Venugopal did not disclose in how many years the group companies plan to pay back all the money.
Venugopal says that the present proposal under Section 12A of the Insolvency and Bankruptcy Code, 2016 is similar to the one that was made in October 2017 and was approved by Joint Lenders' Forum. It was then recommended to the Reserve Bank of India (RBI). Despite the joint lenders' forum approving the proposal, the RBI referred the case to the National Company Law Tribunal under Insolvency and Bankruptcy law. As per our original proposal of October 2017, the total debt for which restructuring was considered was for Rs 31,289 crore, that is, full payment to the creditors. Withdrawal provision under Section 12A was not available in 2017. Section 12A provision was incorporated in the Insolvency and Bankruptcy Code, 2016 in June 2018.
If the COC approves the withdrawal proposal under Section 12A of the IBC, the promoters get to manage the company and service the debt as per the submitted proposal. The Committee of Creditors will continue to hold all pledged shares and approval from them is mandatory for sale/restructuring of any asset, till such time all debts are not cleared.
Section 12A of the IBC provides that the NCLT may allow the withdrawal of insolvency proceedings against a Corporate Debtor if the Committee of Creditors approves the same by 90 per cent vote.