SEPT 24: Consumer durables giant Videocon International Ltd (VIL) is negotiating with a Hutchison group company for offloading up to 20 per cent stake in VIL to fund its Internet-related plans.The due diligence exercise for the deal is currently going on and the final agreement is expected to be signed by the year end, industry sources said here today adding that while a memorandum of understanding (MoU) had already been signed and price negotiations for 15-20 per cent VIL stake were still going on.When contacted, chairman of VIL Venugopal Nandlal Dhoot declined to comment on the issue. The proposed deal assumes significance since it is the first time that the domestic giant will use equity to fund expansion. Also, Hutchison is expected to provide valuable technical inputs to the venture.At present, the promoters hold 41.62 per cent stake in Videocon International, and the public holds 46.97 per cent. While foreign holding is at 2.42 per cent, the remaining nine per cent is held by financial institutions.In line with the Internet-related initiatives, VIL will launch a nationwide dial-up service with initial Rs 130 crore investment, providing service across 85 cities, sources said.Also, the company had last month commissioned its new colour Television (CTV) plant at Aurangabad where it will manufacture the much-hyped web-enabled television.In the first year, VIL plans to manufacture 10,000 such TV sets and go up to 50,000, Dhoot had told PTI earlier, adding that these will be available in 14, 20 and 21 inch screen sizes to begin with.Videocon has already announced Rs 600 crore investment in the next one year in doubling both its CTV as well as component production capacities."We have chalked out major plans for expansion of our Indian operations and this will mean an investment of Rs 600 crore in all over the next one year," Dhoot had said.He said instead of the earlier proposal of signing a joint venture with Onwa, Videocon had decided to invest in setting up a world-class, fully automated plant for CTVs to sell top-quality internet televisions in the domestic market."Toshiba will give us the latest internet TV technology and a separate line will be installed at the new site for producing these sets. We also have a tie-up with TeleCruz of the USA for providing the chip needed for these specialised televisions," Dhoot said.He said the remaining Rs 400 crore investment will be put into doubling the glass shell plant capacity to six million units per annum. With the hiked production capacity, Videocon will increase the export of SKD (semi-knocked down) television kits to European, South African and Middle Eastern markets.The Videocon group is chasing a near 100 per cent hike in sales turnover to Rs 5,000 crore this year against Rs 2,700 crore last fiscal.
