Chinese home appliances maker Haier and global investment firms Blackstone and Goldman Sachs are among the suitors considering making offers to buy bankrupt Videocon’s consumer electronics business valued at close to USD 2 billion, according to people directly briefed on the matter.
All three prospective suitors have reached out to Videocon’s lenders either through their financial advisors or directly, according to people in the know. A formal auction process for sale of the electronics business, which is distributed between as many as fifteen legal entities of VideoconNSE 4.17 percent group, was formally launched.
The investment firms may consider teaming up with local business houses prior to placing binding bids, sources said. At least one other China-based investment holding company was interested in the assets, according to people in the know, though the final tally of suitors would be known once expressions of interests are received in the first week of October.
Spokespersons for Haier, Goldman Sachs and Blackstone declined to comment on the story when contacted by ET.
Videocon Industries Ltd, the listed parent that houses the consumer electronics business, is steeped in Rs 20,000 crore of debt and was plunged into bankruptcy proceedings in June after it failed to repay a group of lenders led by State Bank of India.
A bunch of associate firms that house various parts of the company’s business such as the Videocon brand, manufacturing plants, sales and distribution operations and real estate assets have also been dragged to bankruptcy courts by the lenders.Lenders are considering running a coordinated auction process for the sale of all the units by appointing a common adviser, ET had reported on September 20.
Suitors may be expected to put together a single resolution plan for the fifteen entities subject to relevant approvals from the courts. Haier, which has been present in India for more than a decade, has annual sales of around .3000 crore but aims to be amongst the top three consumer electronics manufacturers in the country.
The company’s top executive in India, Eric Braganza, has spent nearly two decades working for Videocon prior to his current assignment. Videocon sells a wide range of products, including televisions, refrigerators, coolers, washing machines and kitchen appliances. The consumer electronics business has sales of Rs 10,000-Rs 12,000 crore and pan-India presence. One unit being auctioned also distributes the Sansui range of products.
“Anyone who buys the company can add topline quickly as the brand is strong and the company needs some 500 crore cash to resume operations in full swing,” a banker said. ―Economic Times