Dena Bank to classify Videocon debt as NPA; Videocon stock crashes 10%

The Videocon Industries Ltd stock price crashed after Dena Bank announced that it will classify Videocon’s loan amounting to Rs 520 crore as a non-performing asset. On Wednesday, Videocon stock closed at Rs 58.35, down by 6.45 point or 9.95 % on the BSE. 

Late on Wednesday, rating agency CARE Ltd downgraded its ratings on the company’s bank loans and also suspended the rating saying that the company is not providing adequate information on its financials.

Videocon was listed as one of the 10 conglomerates with the largest pile of debt in the Credit Suisse’s House of Debt report first released in 2012. On March 31, 2016, Videocon’s gross borrowing was Rs 47,000 crore as per the Credit Suisse report in February. The company’s domestic debt currently stands at around Rs 24,000 crore, while the rest of the debt belongs to foreign lenders, clarified by director.

On Saturday, there was joint lenders’ forum meeting where bankers told they would implement a CAP to regularise payments. Under CAP, lenders have the choice to either go for rectification, restructuring or recovery and have to decide on which path to take within 30 days

The company started with manufacturing of appliances and TVs, then diversified into oil business in the 1990s and, in the second half of the 2000s, diversified further into telecommunications and direct-to-home (DTH) TV.