Two days after Zee and Essel Group chairman Subhash Chandra wrote an open letter urging his lenders not to react in “an anarchical manner and maintain patience” until the process of Zee Entertainment’s stake sale is completed, the Essel Group on Sunday said that it has “arrived at an understanding” with its lenders that have pledge on shares held by the promoters, not to be declared defaulter following the steep fall in share prices of the group’s listed entities such as Zee Entertainment and Dish TV.
In a statement issued on Sunday, the Essel Group said that the promoters of the Essel Group had a detailed meeting with the lending entities comprising mutual funds, NBFCs and banks, in which it was decided that there would not be any event of “default declared due to the steep fall in price.” It said, “there will be synergy and co-operation, amongst lenders leading to a unified approach,” and the lenders drew comfort from reiteration by promoters for a speedy resolution through a strategic sale in a time bound manner. Commenting on the development, Chandra said, “I am pleased to share that we have achieved an understanding with lenders. We have always valued their immense trust and faith sown in us and the positive and progressive outcome of the meeting, is a true example of the same.”
A Balasubramanian, CEO, Aditya Birla Sun Life AMC said, “I am very glad with the outcome of the meeting, which enabled us to arrive at a consensus, in the interest of all stakeholder.” Facing repayment pressure, shares of Zee Entertainment and Dish TV fell by over 25 per cent and 32 per cent respectively on Friday, Jan 25, 2018, following which Chandra wrote an open letter seeking apology from his bankers, NBFCs and Mutual Funds.
In his open letter, Chandra blamed certain “negative forces” for attacking the share price and “sabotaging Zee Entertainment’s strategic sale process.” He had also blamed the IL&FS meltdown which he said halted roll-overs and diminished the group’s ability to service its borrowings.
Urging his lenders to not to react in an anarchical manner and maintain patience until the process of Zee Entertainment’s stake sale is completed he said, “Post-sale process, we will be positively able to repay the entire dues, but if lenders react in panic, it will only hurt them and us.”
‘No link with any transaction’
In a stock exchanges filing on Sunday, Zee Entertainment Enterprises said the firm has no connection whatsoever with any alleged transaction contained in an article published last week.
Responding to clarification sought by the stock exchanges, it said, “Essel Group had already confirmed that Nityank lnfrapower and Multiventures Ltd, is an independent Company and does not belong to Essel Group….Queries relating to demonetisation, if any from SFIO were directed to Nityank.” It said the SFIO had sought information relating to certain transactions in July/August 2018 from certain Essel Group entities and the requisite Information was provided. There is malicious intent in media reports alleging involvement of Essel Group entities in the probe , it claimed, and said it is initiating legal action. (ENS)