Zee stake sale may face arbitration order hurdle
Mumbai: The interim order in the arbitration between Essel Group main promoter Subhash Chandraand Indiabulls could potentially complicate the case for fund houses that are yet to get about Rs 3,300 crore from Chandra’s Essel group. Although Essel Group said that the shares they are selling are already pledged and the order relates to shares not pledged, fund houses are still looking for clarity on the matter.
In a related development, fund houses that had in February this year entered into an agreement to not sell Zee Entertainment shares after Essel Group delayed payment to them on loans Chandra had taken by pledging the shares of Zee Entertainment may extend the last date beyond September 30. Under the earlier agreement signed between lenders and Essel Group, it had till this month-end to pay to mutual funds and NBFCs. In Thursday’s weak market, Zee Entertainment shares closed 7.9% down at Rs 309.
In late August, Indiabulls obtained an order from an arbitrator that any Zee Entertainment shares held by Chandra, which are not pledged, could not be sold till mid-October. A spokesperson from Essel Group said, “Arbitration proceedings between Essel Group and Indiabulls Housing Finance do not have any bearing on the ongoing stake sale of Zee Entertainment, as shares being divested are already pledged with MFs, NBFCs and banks.” On Wednesday, officials from fund houses that are to get money from Essel Group met the management of the group.