* Refinances $3 bln, raises a further $3 bln-sources
By Prashant Mehra and Swati Pandey
MUMBAI, Aug 3 (Reuters) - Indian consumer electronics maker
Videocon Industries plans to refinance a round $3
billion of debt to cut interest costs and standardise loan
terms, five sources with direct knowledge of the deal said.
The diversified company, which recently made a series of oil
and gas discoveries, is also raising another $3 billion in fresh
long-term debt, partly to fund capex requirements for the energy
business, the sources told Reuters on Friday.
As many as 27 banks are involved in the funding arrangement,
including India's top lender State Bank of India,
Punjab National Bank and IDBI Bank.
The first tranche of the deal will be signed next week,
while the balance is expected to be finalised later this month.
Videocon Industries had long-term debt of nearly 273 billion
rupees ($4.9 billion) at the end of December 2011.
The group, whose companies and subsidiaries have borrowed
from various banks, has proposed bringing all the loans under a
common pool and terms, one of the sources said.
"If the loans are scattered in many places, it makes sense
for the borrower to consolidate it. It will save financing
costs," said the source, declining to be identified as the
matter is not yet public.
The deal will involve some reduction in interest rates for
the banks, although loan tenure will broadly remain the same,
another source said.
A Videocon spokesman was not immediately available for
OIL & GAS FOCUS
Videocon, controlled by billionaire Venugopal Dhoot,
operates in the consumer electronics, telecoms and power
segments but expects most future growth to come from its recent
focus on the oil and gas business.
The group holds a 10 percent stake in huge gas fields
discovered off the coast of Mozambique and Tanzania that are
estimated to hold between 30 and 60 trillion cubic feet (tcf) of
Last month, it also announced discoveries at its Brazilian
offshore blocks, where it holds minority stakes.
Dhoot has said he expects the oil and gas business to
contribute 75 percent to group revenues in future. The blocks
are expected to start producing in 2017.
The business, which will require billions of dollars in
investment, is to be separated from the main company.
Videocon's main consumer electronics business has suffered
in recent years through stiff competition from local and foreign
rivals including LG and Samsung,
although it remains a key player in the washing machine,
refrigerator and television segments.
It is investing in a new appliances plant at Tamil Nadu in
southern India, which is expected to start production later this
Shares in the company, valued at nearly $1 billion, have
traded nearly flat so far in 2012, underperforming the 11.2
percent gain by the main stock index. The stock closed
down 0.6 percent on Friday.
(Editing by Sunil Nair and David Cowell)