Ravva Oil Field Is Key Interest In Anil Agarwal’s Videocon Takeover

Why Anil Agarwal is interested in the insolvent Videocon group.

Anil Agarwal, billionaire and owner of Vedanta Resources Plc. (Photographer: Waldo Swiegers/Bloomberg)
Anil Agarwal, billionaire and owner of Vedanta Resources Plc. (Photographer: Waldo Swiegers/Bloomberg)

Anil Agarwal’s primary interest in the insolvent Videocon group of companies is to consolidate ownership of Ravva oilfield, according to a statement by his company to the London Stock Exchange on June 9.

Thirteen companies of the Videocon group with presence in oil and gas, consumer electronics, home appliances, telecom, real estate now belong to Twin Star Technologies Ltd.

Twin Star Technologies is an Indian subsidiary of U.K.-based Volcan Investments Ltd., which is a holding entity of Anil Agarwal, who founded the Vedanta Resources group.

Globally, Volcan’s business interest ranges from zinc, iron ore, steel, copper, aluminum, power, oil and gas etc., according to the company’s statement.

The Videocon companies were in insolvency resolution and Twin Star’s resolution plan was approved by the National Company Law Tribunal earlier this month.

“We’re excited with this acquisition mainly for Videocon’s 25% Participating Interest in Ravva oil field. This acquisition shall therefore consolidate the overall PI of Volcan Group at 47.5%, the highest in the Ravva JV agreement, followed by ONGC (40%) and Ravva Oil Singapore (12.5%),” the statement said. “Apart from the oil assets, Videocon Group Companies has a diversified asset base in real estate and electronics segment which shall further bring synergies with our growing electronics and LCD business.”

The Ravva Field

The Ravva oilfield is located in Andhra Pradesh and commenced production in March 1993. It is operated by Cairn Oil & Gas, India’s largest private crude oil producer. Cairn, once a listed company, is now a vertical of Vedanta Ltd., and operates 58 blocks across India.

Cairn owns a 22.5% interest in the field, while state-run Oil and Natural Gas Corporation Ltd. has 40%, Videocon Petroleum has 25% percent and Ravva Oil the balance 12.5%. In 2019, Cairn secured a 10-year extension to its production sharing contract.

Subsequent to the closure of Videocon group’s corporate insolvency resolution process, Vedanta’s interest in Ravva will more than double.

Agarwal's bid for the Videocon companies consists of an upfront payment of almost $40 million which is less than 10% of the total bid value and the remaining deferred payments shall begin post completion of 2 years from the acquisition date, the statement said.

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