The Rs 10,673-crore Videocon Industries may utilise the proceeds of its Rs 1,200-crore rights issue to fund expansion of its oil exploration business in countries such as Brazil and Mozambique. It may also utilise some portion to retire earlier debt.
When asked, chairman & managing director Venugopal Dhoot declined to say how the proceeds would be utilised. As of the year ending September 30, 2009, Videocon’s total debt, Indian and foreign units, was Rs 12,067.6 crore. For the Indian grouping alone, it was Rs 9,084.5 crore. The debt to equity ratio was 1.5 during the period. Analysts tracking the company say its foray into capital-intensive businesses such oil & gas, power, etc is what is contributing to debt on its books.
The company had struck oil in blocks located in Brazil and Mozambique recently, for which capital would be needed to fund expansion, Dhoot said in an interview to a TV news channel. Besides Brazil and Mozambique, the company has oil blocks in Australia and Turkey as well.
