Shareholders of two listed companies of debt-ridden Videocon group will receive "nil" money at the time of delisting as the liquidation values of the two firms are not even sufficient to cover outstanding debt.
Videocon Industries Ltd and Values Industries Ltd will be delisted as part of the resolution plan approved for the bankrupt-Videocon group.
There will be no offers to any shareholders of the two companies at the time of delisting of their shares, the firms said in a public notice on Friday.
Under Sebi norms, a company that wants to delist from the bourses has to make an offer to existing shareholders, including public shareholders.
"As the liquidation value of the company is not sufficient to cover the debts of the financial creditors of the company in full, therefore the liquidation value of the equity shareholders is 'nil' and therefore they would not be entitled to receive any payment,"said Values Industries Ltd.
It further said that the equity shareholders are not required to surrender their equity shares to the successful resolution applicant, which is Anil Aggarwal's Twin Star Technologies.
"The resolution applicant, in furtherance of the approved plan, shall not be paying any considerations to the shareholders towards the delisting of the equity shares," it said.
Videocon Industries has fixed June 18, 2021 as the 'record date' for the purpose of delisting of equity Shares from the BSE and the NSE.
As per the resolution plan, all group companies including Values Industries Ltd (VAIL) would be amalgamated into Videocon Industries Ltd (VIL).
However, it had kept Videocon Telecom Ltd out of that.
In VIL, 'promoter & promoter group' has 40.59 per cent share and Public share Holdings is 59.41 per cent.
While in VAIL, the promoters are having 46.76 per cent share holding while the balance 53.24 was with public holdings.
Shares of VAIL have been suspended from trading since March 28, 2018 due to non-compliance of SEBI regulations.
Earlier, VIL in a regulatory filing had said: "It is estimated that the liquidation values of VIL and VAIL are not sufficient to cover debt of the financial creditors of VIL and VAIL, respectively in full. Therefore, the liquidation value due to the equity shareholders of VIL and VAIL is NIL and hence, they will not be entitled to receive any payment and no offer will be made to any shareholder of VIL or VAIL." It is further clarified that no amount is being offered to the financial creditors Lenders for any equity share held or proposed to be held by them in VIL and VAIL under delisting process.
After delisting, 11 group companies would be merged in VIL, which are - Applicomp, CE India, Century Appliances, Electroworld Digital Solutions, Evans Fraser & Co, Millennium Appliances, PE Electronics, SKY Appliances, Techno Electronics, Techno Kart and Value Industries.
As per the 10 step road map, the company said it would first delist the equity shares of VIL and VAIL from BSE and NSE in accordance with the June 9 order of the Mumbai bench of the National Company Law Tribunal.
On June 9, the Mumbai bench of the National Company Law Tribunal had approved Rs 2,962.02 crore resolution plan by Twin Star Technologies.
In its 47-page-long judgement, NCLT while approving Twin Star Technologies'' bid had observed creditors of Videocon Industries will be taking nearly 96 per cent haircut on their loans and the bidder is "paying almost nothing".
Videocon Industries and its 12 group companies had a total admitted claims of Rs 64,838.63 crore.
