VoVL’s lenders vote in favour of resolution plan by BPCL

Lenders of VoVL, the oil and gas exploration company of Videocon Industries, almost unanimously voted for a resolution plan given by Bharat Petroleum Corp (BPCL), said people aware of the development.

VoVL, undergoing insolvency proceedings, received 99.96% votes in favour of a proposal to sell the company to the state-owned BPCL.

One unsecured lender with 0.04% debt abstained from voting, the people cited above said. Voting on the VoVL’s resolution plan ended on June 22.


The resolution professional will submit the plan to the National Company Law Tribunal (NCLT) for approval. The resolution of VoVL will be among the top bigticket cross-border insolvency resolutions, said people cited above. The assets of VoVL — mainly the oil exploration blocks — are in Brazil while the sale process was conducted in India.

BPCL's subsidiary BPRL Ventures BV had created a 50:50 joint venture with Videocon’s subsidiary Videocon Energy Brazil for oil and gas exploration in the South American country. As a JV partner, BPCL has the first right to match any offer that lenders receive for VoVL oil basins as per the contractual arrangements governed by Brazilian law. Mid-April, 90% of VoVL’s lenders voted on two resolution plans.

The first was to sell the Potiguar Basin and Sergipe Basin to Eneva for $250 million and then sell Campos Basin to PetroRio for $30 million. The second resolution was to give BPCL 30 days to exercise the right to match the offer made by the two Brazilian companies.

BPCL consented to match Eneva and Petrorio's offers, ET reported on May 22. However, as against the $280 million that the two Brazilian companies offered, BPCL will pay $200 million to lenders as upfront payment after NCLT approves its resolution plan.

The difference of $80 million is contingent liabilities that BPCL suggested would be paid to lenders on recovery of certain dues, the first person said. After 2018, Videocon failed to pay its share of cash calls for gas exploration that were made good by BPCL. As a result, BPCL’s participating interest increased to 61% while that of Videocon dropped to 39%.

The RP has admitted Rs 30,640 crore in claims from financial creditors. “The recovery is sub-10% but that was the best offer before us,” said one of the lenders.

In April, the government-owned National Asset Reconstruction Company gave a revised and improved offer of Rs 1,200 crore to lenders for the loans of VoVL. “Lenders have neither rejected nor accepted the NARCL offer.

They can accept the offer even after the BPCL plan is given to the tribunal for approval just as it happened for Jaypee Infratech,” the lender cited above said.