The Hindu Business Line : BPL-Sanyo CTV venture to raise $30 m

BPL's joint venture with Sanyo for the colour television business, armed with a letter of comfort from the latter, is planning to tap the financial institutions, including overseas banks such as Sumitomo Mitsui Banking Corporation in Japan, for raising up to $30 million as working capital requirements.

Informed sources said the new joint venture company, in which both the partners would hold 50 per cent stake each, was expected to raise working capital funds on its own either from domestic or foreign banks.

Sanyo paid BPL Ltd $80 million in cash for transferring its mainstay CTV business into a joint venture in July this year.

Almost $70 million will be used by BPL Ltd to de-leverage its balance sheet and the company, as equity in the joint venture entity will use the remaining $10 million.

"The joint venture will take care of the working capital requirements on its own, and it will be backed by a letter of comfort from Sanyo if needed. The new company is in the midst of finalising its business plans and would approach both domestic and overseas banks for raising up to $30 million. We are looking at the possibility of involving Sumitomo Mitsui Banking Corporation given their close ties with Sanyo," sources said.

The joint venture is expected to roll out co-branded CTVs into the market by February next year.

Sanyo officials who would join the top management of the new entity have already reached Bangalore after the Corporate Debt Restructuring (CDR) cell on October 8 agreed to BPL Ltd's fiscal restructuring with the lenders gave consent for transferring CTV business into a joint venture with the Japanese giant.

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