New Delhi: India’s bankruptcy court has allowed billionaire Anil Agarwal’s Twin Star Technologies to take over Videocon Industries Ltd., according to people familiar with the matter.
Twin Star, a part of Agarwal’s Vedanta Group, will pay about Rs 30 billion ($410 million) to Videocon’s lenders, the people said, asking not to be identified as the details are not public. The company will put up Rs 5 billion within 90 days and the rest as non-convertible debentures over a period of time, they added. Vedanta Group didn’t immediately respond to an email seeking comment.
Lenders had sought the National Company Law Tribunal (NCLT)’s approval in December for the resolution plan submitted by Twin Star. The bankruptcy court approved the plan in a verdict on Tuesday.
Videocon, a consumer durables company manufacturing air conditioners to washing machines, was among the first 12 companies pushed into bankruptcy after directions from the Reserve Bank of India in 2017. Indian banks have been battling unpaid loans for the past couple of years and the country is saddled with one of the worst bad-debt ratios in the world.
The conglomerate’s protracted debt resolution underscores the challenges facing Indian lenders to recover their money amid a severe pandemic that threatens to add to the bad loans.
Videocon’s debt stood at over Rs 635 billion in 2019, according to bankruptcy case related disclosures on the company’s website. Out of this, Rs 574 billion was owed to over three dozen banks and other financial creditors. – Bloomberg