BPL develops land bank to repay debt

Bangalore-based BPL Group is believed to be in advanced talks with two real estate developers "" Salarpuria and Nitesh "" to develop a part of its land bank.

According to industry information, BPL is expected to rake in Rs 300 crore from the development -- much-needed cash for this debt-ridden group.

While Salarpuria and BPL were not available for comment, Nitesh did indicate that it had shown interest in a property belonging to BPL.

BPL owns about 40 acres in and around Bangalore, on which it had built factories to manufacture televisions, refrigerators and other consumer appliances.

This land bank is a critical asset for the group, which spread itself thin during its heydays in the early 1990s and found itself creaking under a debt burden of Rs 1,500 crore as South Koreans LG and Samsung ran away with the consumer electronics market. 
 

BPL Limited (estimated FY08)
Total income	Rs 200 crore
Net loss - (approx)	Rs 40 crore
Total debt - (approx)	Rs 1,500 crore
Land bank - around	40 acre

The group has in its fold BPL Ltd, BPL Appliances, BPL Refrigeration and BPL Engineering. The last three are convalescing in BIFR.

The company has been caught in a protracted settlement process with various financial institutions and Asset Reconstruction Company of India Limited (ARCIL). Reports indicate that Deutsche Bank has stuck a deal with ARCIL to buy the receivables for about Rs 350 crore, a huge discount on the actual liability of BPL Ltd.

In a parallel development, according to sources in BPL, its equal joint venture for colour televisions with Sanyo is likely to end by the end of this year. However, both the players denied such a move.

As a measure to wriggle out of the debt burden, BPL in late 2005 had entered into this joint venture with its long-time technology partner, Sanyo. This joint venture, in the last three years, is understood to have carved out 5 per cent market share in the 10 million colour televisions market.

In the early 1990s, BPL's share of the market was a healthy 15 per cent.