The landmark move is expected to quicken Videocon<\/a>’s insolvency resolution and could pave the way for faster processing of other bankruptcy cases involving multiple entities that are part of one corporate group, legal<\/a> experts said.
Following the NCLT<\/a> order, prospective suitors will now have to submit one resolution plan for all the 13 Videocon units, which house the group’s consumer electronics business. The tribunal’s order was in response to a plea by State Bank of India, which sought consolidation of insolvency proceedings of 15 Videocon group companies in January on the grounds that their operations were connected and a combined process would yield better realisation of value.
“There are two companies that are not to be directly consolidated, the reason is that they have their own independent source of income, they also have liabilities that can be segregated based on their assets and liabilities ratio,” the tribunal said. The two companies left out of the consolidated proceedings are KAIL Ltd. and Trend Electronics.
SBI had filed multiple pleas in various courts against Videocon Industries Ltd. and 14 other companies controlled by founder Venugopal Dhoot<\/a> last year to recover Rs 20,000 crore after they defaulted on payments to a consortium of banks. The court appointed Mahender Khandelwal as the resolution professional. “The order is in the interest of the lenders and ensures maximisation of the value of the assets,” said Sandeep Ladda, a lawyer representing Videocon group and Dhoot. SBI was yet to respond to ET’s queries.
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