Videocon redeems USD 194.40 mn FCCBs but anxiety from debts remains

Videocon Industries (VIL) in last November had tried to convert its Foreign Currency Convertible Bonds into ordinary equity shares, in exchange of a part of outstanding amount of existing USD 200 million at 6.75 per cent which was due on 16th December, 2015.

In the process of reducing its debt it has partially paid in cash amount of USD 97.20 million (approx. Rs 640 crore) along with the applicable interest and fees and remaining part of the FCCBs is settled with issuance of another series of foreign currency convertible bonds (FCCBs) of USD 97.20 million on 30 December 2015 as part of the redemption which was issued during the year 2010. This new series of FCCBs of USD 97.20 million will due on 2020.

In the month of November the company sold its spectrum for two Circles to Idea Cellular for Rs 3,310 crore out of seven circles held by the Group.

However despite the above the debt reduction process did not help much. As on June 30, 2015, the company has total debt of Rs 23,011 crore and its debt to equity ratio stands at 2.23x.

In 2015, its stock price declined by around 25 per cent even it posted better results in 9m of CY15 due to high level of debt. The company has reported net profit of Rs 28.62 crore as against loss of Rs 53.38 crore in the corresponding period of the previous year.

As per its September 2015 shareholding pattern, the company’s promoter holding stands at 65.6 per cent out of which 99.04 per cent of its holding is pledged.

Currently, shares of Videocon Industries is trading at Rs 123 per share, up 1.15 per cent from its previous close on the BSE.