Videocon Inds hits all time low

Videocon Industries hit an all-time low at Rs.8.62 today, going down 5%. It has recovered from there and is now at Rs.8.85, down 2.5%.

The stock sunk on the news that the National Company Law Tribunal’s (NCLT) Mumbai bench admitted the insolvency petition filed by lenders against Videocon after the company failed to repay its Rs. 21,000 crore debt. 

The consolidated debt of the company is Rs.44,000 crore but of this, 50% is housed in its foreign arm, which has not been taken to the bankruptcy court.

The question doing the rounds – will Videocon be able to avoid the NCLT?

Answering this our Editor, Mr.SP Tulsian has said, “Dhoot is relying on new IBC rules were withdrawal is allowed, if 90% lenders agree. Withdrawal can also happen before publication of notice inviting EoI. Dish open offer may see debt reduction by Rs.3200 crore as Videocon might offer 44 crore shares  at Rs.74 per share of Dish in open offer. This may see standalone debt at Rs.15,000 crore, which promoter may like to settle for 80 to 85%. So, resolution is seen as a trigger now. Dhoot is seen as capable enough to repay the debt. This may be a case like Binani Cement , where Binani paid a big price by defaulting. Hopes are alive.”