Videocon blames demonetisation, Supreme Court, Brazil for Rs 39 billion debt pile
A bankruptcy court admitted an insolvency petition filed by creditors, led by State Bank of India against Videocon, and ordered debt reorganisers to take over its management. `Updated: Jun 12, 2018 16:13 IST
Who’s at fault for Videocon Industries Ltd.’s Rs 39 billion ($579 million) debt pile? The Indian maker of consumer appliances is casting the blame on Prime Minister Narendra Modi’s November 2016 cash ban, the Supreme Court and the Brazilian government.
A bankruptcy court admitted an insolvency petition filed by creditors, led by State Bank of India against Videocon, and ordered debt reorganisers to take over its management. That prompted the company to file an appeal to wrest back control, according to an exchange filing on Tuesday.
Modi’s clampdown on cash in November 2016 chocked supplies for making cathode ray tube televisions and forced it to shut the business, Videocon said in the filing. While its oil-and-gas business got entangled in red tape in Brazil, the telecommunications venture suffered losses after the Supreme Court cancelled 21 2G telecom licenses.
The company’s shares, which have plunged a whopping 96% over the past five years, traded at Rs 7.65 at 2.35 pm.
Videocon’s energy business failed to get approvals from the Brazilian government to start its equal venture with Brazil Petroleum Ltd.. In India, the company lost a revenue source when the top court in February 2012 cancelled 156 licenses of various telecom operators, according to the filing.
First Published: Jun 12, 2018 14:47 IST