Videocon Industries Ltd., India’s biggest consumer-electronics maker, plans to combine its energy assets and sell a stake in the business to help pay debt and fund purchases of oil and gas areas.
The company, led by billionaire Venugopal Dhoot, is in talks with investors including Chinese companies for the stake sale, said Suresh M. Hegde, the group’s finance chief. Aurangabad, India-based Videocon may also sell as much as 25 percent stake in the energy unit in an initial public offering within six months “to monetize oil and gas assets,” he said.
Videocon is betting state-run Chinese companies, which bid a record $38.8 billion this year to acquire energy assets overseas, will extend their purchasing spree. Prime Minister Wen Jiabao, who is visiting the South Asian nation this week, said China will seek to boost commerce with India while reducing his country’s $18 billion trade surplus.
Chinese investors “give better value than any other investors,” Hegde, said in an interview in his office in Mumbai yesterday. “Chinese demand for oil assets is huge.” He didn’t name the investors.
India’s energy use may more than double by 2030 to the equivalent of 833 million metric tons of oil from 2007, while China’s demand may rise 87 percent to 2.4 billion tons, according to the Paris-based International Energy Agency.
Brazil, Mozambique
Videocon and partners Anadarko Petroleum Corp. and Bharat Petroleum Corp. made three natural gas discoveries off the coast of Mozambique, according to a Nov. 29 statement. The company and its partners have also found hydrocarbons in Brazil and Indonesia and Brazil.
“Undoubtedly, they have some value going forward in their energy assets,” Kishor Ostwal, Mumbai-based chairman of CNI Research Ltd. They will get a “good response” from investors, he said.
Videocon’s shares have declined 8.8 percent in Mumbai trading this year, lagging behind the 13 percent gain in the benchmark Sensitive Index. The stock fell 1.5 percent to 219 rupees as of 2:30 p.m. in Mumbai.
The company has 115.5 billion rupees ($2.5 billion) of debt, according to data compiled by Bloomberg.
Dhoot, with $2.67 billion in assets, is ranked India’s 25th richest man, according to Forbes magazine.
Source: Bloomberg