The bank has mandated SBI Capital Markets to look for this “common process adviser".
According to the notice, the adviser will need to coordinate among the committees of creditors and resolution professionals of the 15 companies and be the single point of contact for the prospective bidders on behalf of the lenders.
SBI believes this will help streamline the bidding and resolution process “to enable maximization of value for all stakeholders of the Videocon Group Companies from the prospective resolution plan(s)".
The companies include Videocon Industries Ltd, Videocon Telecommunications Ltd, KAIL Ltd, Electroworld Digital Solutions Ltd, Value Industries Ltd, Evans Fraser and Co (India) Ltd, Millennium Appliances India Ltd, Sky Appliances Ltd, PE Electronics Ltd, Techno Electronics Ltd, Trend Electronics Ltd, Applicomp (India) Ltd, Techno Kart India Ltd, Century Appliances Ltd and CE India Ltd.
Videocon’s businesses, especially in consumer electronics and home appliances segment, are dependent on each other, according to SBI.
“The consortium of lenders to Videocon Group companies believe that a comprehensive resolution of all the Videocon Group Companies in a consolidated manner may fetch higher value for all the stakeholders as opposed to individual resolution of each Videocon Group Company," the notice said.
Legal experts said this will set a precedent for future insolvency cases where a conglomerate with several groups comprises faces the resolution process.
“Each company is a different legal entity and hence requires separate RPs. However, when group companies are interconnected or in businesses that complement each other, this kind of arrangement will surely fetch more value for lenders and also other stakeholders," said Sandeep Singhi, managing partner of corporate and dispute resolution firm Singhi & Co.
Nishit Dhruva, managing partner of law firm MDP & Partners, said appointing separate RPs for 15 companies and another advisor to liaison among them will add to the red tape. “The best way to deal with the situation is to have one RP for the entire group rather than going by the dotted line," said Dhruva.
On 5 October, Venugopal Dhoot, the chairman and managing director of Videocon Industries Ltd, had approached the NCLT to seek its intervention to stop inviting expressions of interest by the RPs of these 15 companies as the promoters have approached the principal bench in New Delhi for consolidation of the resolution process.
“The promoter of the Aurangabad-based group has cross-shareholdings in every company and an expression of interest at this stage in any company that is under the insolvency proceedings can harm the prospects of other companies as well," a lawyer representing the promoters said on condition of anonymity.
Earlier on 6 June, the NCLT had admitted the insolvency plea filed by SBI against Videocon Industries Ltd. The single bench of NCLT, presided over by M.K. Shrawat, ruled in an oral order that the insolvency petition is fit for admission.
Another bench of the NCLT had also admitted insolvency action against Dhoot-owned mobile operating firm Videocon Telecommunications Ltd (VTL).
At the time of admitting both the insolvency petition, the tribunal had also approved the name of Anuj Jain as interim resolution professional (IRP) to conduct the corporate insolvency resolution process (CIRP) of Videocon Industries as well as Videocon Telecommunications.
In Videocon Industries, the resolution professional (RP) has admitted around ₹ 57,164 crore of financial creditors and around ₹ 29.72 crore of operational creditors’ claim. Meanwhile, a consortium of 18 banks has an exposure of ₹ 1,700 crore to Videocon Telecommunications, which defaulted on loans and bank guarantees in January 2018.