MUMBAI: ICICI Bank has clarified that it has not given loans to any of the five individual companies in the Videocon Group and all the loans were part of a bank consortium.In a clarification to the stock exchanges ICICI Bank said it had participated in the consortium of lenders for consolidation of loans to Videocon Industries and 12 associate companies for which ICICI Bank was not a lead lender and the information memorandum for the loans were prepared by other banks.
“The bank did not provide individual facility to any of the five companies mentioned. As part of this programme, the consortium assessed the financials of Videocon Industries as well as the consolidated financials of the group. The structure enabled the consortium to pool the cash flow of all the obligator companies towards debt servicing….the 12 associate companies of Videocon were made ‘co-obligators’ of the loan, which meant that they were obligated to pay for the loan in case of default by their group,” ICICI Bank said.
Banks in a consortium routinely create their right or charge over the assets of all the obligator companies, ICICI Bank.