ESSEL GROUP GETS TIME TILL SEPTEMBER TO REPAY LOANS
Secures formal consent from creditors
Subhash Chandra-led Essel Group on Sunday said it had secured a formal consent from lenders to service its debt, including time till September 2019 to repay its loans.
The second round of meeting with lenders comes a week after the first round when the group had sought to allay their fears on repayment. Mutual funds and non-banking financial companies were part of the meeting on Sunday, the group said, covering 96-97 per cent of the loan value.
It is unclear whether public sector banks (PSBs) were part of this meeting.
Speculation has been rife that PSBs are unhappy with the developments at Essel Group, prompting lenders such as Bank of Baroda and Credit Suisse to offload about 7.4 million Zee Entertainment shares on Friday amounting to ~267 crore.
Essel Group has significant debt on its books, taken by the Indian promoters for privately owned infrastructure firms. The loans have been taken against shares in listed entities Zee Entertainment and Dish TV.
On January 25, the two listed firms saw their stock price fall sharply, by 26 per cent (Zee) and 33 per cent (Dish TV), respectively, after reports of a link between the group and a firm (Nityank Infrapower) being probed by government agencies surfaced. The group has since denied any links with Nityank, a point it reiterated on Sunday as well.
The conglomerate also said the time it got to repay loans, namely, till September 30, 2019, would be sufficient for it to complete its sale of assets, which is being used to service its debt.
The company has kicked off a sale of infrastructure assets as well as a sale of a part of the promoter holding in Zee.
While the sale of one infrastructure asset is nearing completion, two others will be done in the next three to six months. The promoter stake sale in Zee is expected to be completed by April.
Essel Group Chairman Subhash Chandra said, “I am glad the formal consent with the lenders has been achieved. While their assurance given last week itself was more than enough, the formal consent seals and justifies their belief and trust in us.”