 "Videocon denies rumours of plans to convert loans into equity")
Consumer products major Videocon Industries said on Friday that it has no plans to convert its loans into equity and is, in fact, paying all its loans in time.
The company had sought shareholders’ approval for a conversion of loans into equity in an Extraordinary General Meeting (EGM) to be held in October as an enabling provision which led to speculation that it is converting its loans.
However, “there are no proposals of conversion of loan into equity, either pending or envisaged anytime in the future,” the company said in a statement.
“We have been regularly servicing our debt from time to time and all accounts are standard accounts and there is no event of default. The net debt of Videocon Industries is approximately Rs 22,500 crore and the same is being serviced fully. The reserves and surplus as per last audited balance sheet is Rs 10,028 crore," the statement said.
The Reserve Bank of India has mandated all banks to ensure the compliance of Section 62(3) of the Companies Act, 1956 for all existing as well as future loans taken by corporate borrowers. This is to be done by obtaining an appropriate enabling resolution for enforcing compliance for loans with a convertibility clause option, notwithstanding whether such conversion takes place or not during the currency of the loan.
“The company, therefore, is only complying with the regulatory changes in the recent past, the changes in the Companies Act, 1956 and in line with various directives issued by the Reserve Bank of India, from time to time with a special resolution under Section 62(3) of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 and Rules,” the company said.
