Famed BPL brand pledged to ICICI Bank

BPL owes Rs 475 crore in term loan to ICICI Bank

The famed BPL brand, which was once valued at Rs 650 crore, is now under the exclusive charge of ICICI Bank. The brand, with which brand ambassadors like Amitabh Bachchan were associated in the heyday of the company, has been pledged against the debt BPL raised from ICICI Bank.

At last count, BPL has Rs 475.60 crore as outstanding term loan to ICICI Bank.

ICICI Bank has confirmed that the brand is pledged to the bank till such a time payments are made by BPL. This is part of corporate debt restructuring package.

BPL, according to a brand analyst, still commands a decent amount of recall. On parameters such as unaided awareness, it is among the preferred brands and enjoys quite a wide brand footprint in terms of sheer presence in India.

"In fact, BPL still enjoys similar status with LG on brand hygiene-related factors and differentiation that leads to the brand being chosen among those that are acceptable," the analyst noted.

According to some studies, BPL has a presence in 30 per cent of all colour television outlets in India and has one of the widest service networks. "The only drawback this brand currently has is that it scores low on the excitement factor compared to LG, Samsung and Onida," he added.

Besides the brand, various banks and financial institutions have charge over certain key assets of BPL Ltd. HDFC has specific charge on certain buildings in Bangalore, UCO Bank and UTI Bank on real estate in Pune and Canara Bank on real estate in Noida and Chennai.

In an effort to restructure its operations and to bring back the brand to its stable, BPL has outlined a comprehensive debt restructuring package to its lenders who have a cumulative outstanding of Rs 1,400 crore.

As part of this exercise, BPL Ltd recently hived off its core colour television business into a 50:50 joint venture with its long time technology partner Sanyo. BPL will get a total of Rs 322 crore for transferring its CTV business to this JV.

The company under this package has offered three options under which one of the options for banks and financial institutions is that they agree for a waiver of 72 per cent and they would need to take steps for withdrawing legal suits filed against BPL.

Another option for lenders is an upfront cash payment aggregating 25 per cent of loans and waiver of 50 per cent loans with the remaining quantum being restructured over an extended period.

Lenders opting for the option and who have exclusive charges will continue to do so and all the remaining properties would be put in a common pool and charge would be created for all lenders opting for the option on a pari-passu basis.

The same clause over control of exclusive charges stays if the lenders opt for another scheme under which 75 per cent of the outstanding would be converted into loans carrying zero per cent interest repayable in 10 years while the remaining part would be spread over an extended period.

While it is not clear, whether which option ICICI Bank would opt for, it is for certain that BPL brand will have to witness some intense competition to regain the status it had once occupied in the minds of consumer.