BPL group, the consumer electronics major, is learnt to have run up a staggering Rs 1,000 crore (Rs 10 billion) plus debt in its efforts to have a backward integrated manufacturing plant and its foray into other sectors.
The company as part of its restructuring is looking at shifting this debt, mostly from domestic financial institutions, overseas through external commercial borrowings at a much lower interest rate.
It is also learnt that the much-awaited Sanyo investment will most likely be in the colour television business of the group.
A senior company official said: "There was heavy investment in building up capacities for a range of products. The current debt is in the range of Rs 1000-crore plus and the ongoing restructuring is aimed at managing this in a cost-efficient way."
When contacted for official comments, a company spokesperson said: "We are in the process of finalising the restructuring plan and we should be ready with all details in around 15 days."
A institutional source, who is working closely with the group, told Business Standard: "Let's face it. Sanyo's entry is more or less confirmed. They are interested only in the group's CTV business and not in other products."
Another aspect that has emerged during the restructuring is that the group is looking at a single integrated marketing organisation for its slew of products.
The other issue the group will have to worry about is the government's permission for its ECB. "Usually, companies which do not have a good record in debt management are not given permission for ECBs as defaulting on external debts will bring a bad name to the country," the source said.
"The group companies have a large installed capacity and don't have working capital as the group is caught in a vicious circle of servicing the huge debt being carried over. The decision to move this debt with low-cost money will be sewed up early enough," the source added.
It is also learnt that the head of the group's home appliances business, L H Bhatia, a veteran with the group, is looking at a premature retirement.
"His decision to move out has nothing to do with the restructuring. He wants to be on his own and talks are on for taking a decision on his exit," the group spokesperson said.
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