Vedanta offers guarantee for Videocon bid, now lenders' preferred bidder: Sources | Economic Times

Mumbai: Anil Agarwal-led Vedanta Group has offered a full corporate guarantee for its offer to buy out the distressed Videocon Industries, tilting the scales in the favour of its subsidiary Twin Star Holdings as the preferred bidder for the oil-to-consumer electronics company, multiple persons involved in the process said.“If you really evaluate the offers on the table, there was not much difference between Vedanta’s offer and the one from the UK-based fund, but Vedanta showed intent by offering a corporate guarantee, which when taken into consideration, backs this deal with the full financial might of the group because of which an overwhelming majority of the lenders voted for it as a preferred bidder,” said a person involved in the discussions.Voting closed late on Friday evening. Results are yet to be officially declared but lenders who were individually informed about the voting said about 94% of the creditors by value voted for Twin Star; much higher than the 66% mandated by law to comfortably make it the preferred bidder.“Twin Star’s offer totals ₹3,500 crore which includes ₹2,700 crore NCDs and ₹551 crore cash upfront with the rest payable to operational creditors and some equity to financial creditors... Vedanta... has a strong credit history. It can be trusted to complete its commitment. Besides, it is ready to offer a corporate guarantee, which makes it was the best bet for all lenders,” said a second person involved in the negotiations.A Vedanta spokesperson did not reply to an email seeking comment.The other shortlisted fund, London’s V Shaped Investment Management, failed to gain the confidence of the creditors as it could not deposit the ₹1 crore bidding guarantee.Videocon has 54 financial creditors with 33 in the committee of creditors. SBI with 19.15% vote is the largest, followed by IDBI (16.63%) and Central Bank of India (8.69%). All these large creditors have voted for Twin Star, people involved in the process said.