BPL to raise Rs 775 crore

Sanyo deal to bring 50% funds

The debt-ridden BPL Ltd hopes to raise a total of Rs 774.13 crore in an effort to put its house in order. The company, which has run aground under the weight of a debt of Rs 1,400 crore, has managed to tie up Rs 322 crore (which is less that 50 per cent of the requirement) from the sale of its colour TV business to a 50:50 joint venture with Sanyo as part of the initiative.

In addition to this, BPL will get Rs 30 crore from the sale of its alkaline business, sale of investments under promoters' contribution to the tune of Rs 100 crore and internal accruals of Rs 221.3 crore.

On top of this it intends to raise Rs 92 crore from fresh term loans. The company already has a total outstanding of Rs 615.6 crore under term loans from 12 banks and financial institutions. So it is not clear how the company will raise a further term loan of close to Rs 100 crore.

BPL is also in the process of raising Rs 92 crore from a foreign investor which will be used to meet the statutory liabilities of Rs 51 crore and unsecured creditor payments of Rs 15 crore.

The company, once the market leader in colour TVs in India, has stated that the cost of restructuring will be Rs 746.2 crore under which capital expenditure will be Rs 25 crore in the first five years, outflow to creditors will be Rs 34 crore over a five year period.

BPL will shell out Rs 310 crore as upfront payment to banks and financial institutions in the first year, Rs 103 crore during 2-5 years and the interest of close to Rs 81 crore over the entire five year period.