Roopam Asthana, chief executive officer and whole-time director of Liberty (Videocon) General Insurance said, “Basically the exit of Videocon is related to their financial situation. Even without being admitted into the National Company Law Tribunal (NCLT), their ability to invest in our joint venture would have been restricted by their creditors. Therefore, the decision to exit was a mutual one.”
Videocon Industries, at the end of December 2017, had a debt exposure of Rs 200 billion, of which it owed Rs 39 billion to the State Bank of India (SBI). The company and their lenders could not draw-up a resolution plan by the end of December. In the first week of January 2018, the SBI referred Videocon Industries to the NCLT for insolvency and/or bankruptcy proceedings.
The next hearing for the company is due on March 27. KPMG, the global consulting and auditing firm, has been appointed as the resolution professional by the lenders. Videocon Industries has been admitted to the NCLT, but the tribunal is yet to decide whether proceedings, under the insolvency and bankruptcy code, should be initiated against the promoters of the company.
Asthana told Business Standard that all of Videocon Industries’ stakes have been sold and the requisite shares have been transferred.
The company said it had received the necessary regulatory approvals for rebranding and would change its name to Liberty General Insurance Limited with the Registrar of Companies, in due time.
“Everything remains the same. There is no change envisioned either at the operational level or at the strategy level,” Asthana said.
Enam Securities is a private investment company that makes long-term investments in listed firms, as well as in private companies.
The DP Jindal Group conglomerate is a dominant market player in the seamless and Electric Resistance Welding steel tubes manufacturing segment.
“We will continue to have access to the Videocon network for sales, as is required for the growth of business,” Asthana added.
“This joint venture brings together three promoter organisations whose values are based on a client-first approach to business. It reiterates our commitment to bring new experiences to our customers,” he said.
Liberty Videocon commenced operations, after receiving an Insurance Regulatory and Development Authority of India license in 2013. It has grown by 38.68 per cent as of December 2017, with a market share of 0.54 per cent. Its total paid-up capital is Rs 10.84 billion.