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Post Info TOPIC: Videocon to convert Rs75k-cr debt to equity


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Videocon to convert Rs75k-cr debt to equity
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Sep 25 2015 : The Times of India (Chennai)
 
SHAREHOLDER NOD AWAITED - Videocon to convert Rs75k-cr debt to equity
Mumbai:
TNN
 
 
 
In a surprise move, debt-laden Videocon Industries has called an extraordinary general meeting on October 12 to obtain shareholders' approval to convert part of its Rs 75,000 crore of debt (borrowing limits of the company) into equity by way of an enabling resolution. This is in spite of the fact that the company received Rs 15,000 crore in cash last year by selling its 10% stake in a Mozambique gas block for $2.5 billion.

Confirming the move, Videocon Group chairman Venugopal Dhoot told TOI, “In line with regulatory changes in the past and in the Companies Act, and in line with various directives by the RBI from time to time, the company is seeking an enab ling resolution under section 62 (3) of the Companies Act.“ Videocon's debt amounts to almost 1% of the banking sector's advances, which today stand at Rs 67 lakh crore.

The Videocon Industries stock closed at Rs 137 by end of Thursday's trade on the BSE.At that price, the company is valued at Rs 4,365 crore. The debt is taking a toll on the company's profitability as Videocon reported profits of just Rs 10.6 crore on revenues of Rs 3,119 crore for the quarter ended June 2015, as most of the income went into servicing the debt burden. At Rs 40,000 crore, banks like SBI, IDBI, ICICI and Central Bank of India account for about half of Videocon's loans.



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