Videocon revives plan for oil, gas asset sales
With global crude oil prices recovering to $52 a barrel, Videocon Industries is planning to revive its oil &
gas asset sales, to repay debt.
“The group is repaying all its loans in time. With oil prices peaking again, we are now reviving plans to
sell off our oil and gas assets,” group chairman Venugopal Dhoot said on Friday.
At the peak of oil prices, their Brazilian exploration blocks were valued at Rs 50,000 crore. The group
also has eight oil & gas assets in Brazil, Indonesia and East Timor.
After a 13-year low of $27 a barrel in February, the price of Brent crude touched $52 a barrel this week.
A shot in the arm for diversified conglomerates Reliance Industries and Videocon Industries, which had
invested in oil & gas assets across the world.
A senior executive with a public sector bank here said lenders are assessing if Videocon’s cash flow
issues are short-term or not. The group sold off its Mozambique gas field for $2.5 billion (Rs 15,000
crore) in January 2014 and its mobile phone radiowave bands to Bharti Airtel for Rs 4,428 crore in March
this year, to repay loans. The group has consolidated debt of Rs 43,017 crore, says CARE Ratings. Its
finance costs are around Rs 600 crore a quarter.
The group also plans to exit its insurance joint venture, which it had set up with Liberty Insurance of the
US. The family also offloaded a 33.5 per cent stake in its direct-to- home television (DTH) business to US-
based SEAC Fund for $300 million and listed the company on Nasdaq. The money was used to grow the
DTH business in India.
Videocon revives plan for oil, gas asset sales “The lenders have given support to group through bilateral
modification of exposure. The account is standard and we want to avoid the group turning into a major
headache,” said another top bank official. The cancellation of telecom licences by the Supreme Court in
2012 resulted in the group’s telecom company losing revenue and profit.
In the March quarter, Videocon on a standalone basis reported total income of Rs 2,775 crore and loss
of Rs 190 crore, compared to total income of Rs 3,304 crore and profit after tax of Rs 10 crore during the
same quarter of 2015, said CARE Ratings. The scrip traded flat at Rs 104 on the BSE on Friday.
