Essel Group promoters open to selling over 50% of their stake in Zee Entertainment, in talks with over 2 buyers
As on 31 December, 2018, promoters held 41.62 percent stake in ZEEL Entertainment Enterprises Ltd
Earlier this week, Essel Group had sealed a formal agreement with its lenders to keep its companies afloat
Essel Group's promoter entities sold shares worth over Rs 1,050 crore in six listed group firms in open market
On 25 January, Essel Group companies had come under massive selling pressure, plummeting up to 33 percent
New Delhi: Promoters of Zee Entertainment Enterprises Ltd (ZEEL), the flagship firm of troubled Essel Group, are open to sell over 50 percent of their holdings in the firm as a part of their asset monetisation to repay debt, and are in talks with more than two investors for the same, a senior company official said.
Zee Entertainment Enterprises had announced in November last year that its promoters, led by Subhash Chandra, planned to sell up to 50 percent of their equity stake in the company to a strategic partner.
"Our intent has not changed...but if somebody is making an offer (to buy) beyond the 50 percent stake we will look at it," ZEEL MD and CEO Punit Goenka said in an analysts' call.
He was responding to a query on whether the promoters would be looking to sell a higher stake considering their holding has went down to 39.08 percent following sale of 24.38 million pledged shares.
As on 31 December, 2018, promoters held 41.62 percent stake in ZEEL.
Goenka, however, said, as part of the talks with the potential investors, the promoters had earlier indicated willingness to sell around 20 percent of their holding.
Responding to another query on the number of potential buyers, Goenka said the figure of "at least two or more players" which he had put out in an earlier call with analysts "still holds".
Earlier this week, Essel Group had sealed a formal agreement with its lenders to keep its companies afloat, under which it gets time till September to deleverage or pare its debt. Rs 13,500 is the loan against shares of all the listed companies of the promoters
Goenka said the group is working on multiple strategies; as and when which fructifies first, all of that equity realisation will go towards payment of this facility of Rs 13,500 crore.
While he did not give an exact timeline for concluding stake sale by the promoters, Goenka said, the company has set a March–April deadline for the sale.
Essel Group's promoter entities sold shares worth over Rs 1,050 crore in six listed group firms in open market between 25 January and 1 February, 2019, for paying off lenders who were not part of an agreement to prevent the declaration of default on loans against pledged shares.
According to multiple regulatory filings by different promoter group entities of Essel Group, shares of Zee Entertainment Enterprises, Dish TV, Zee Media Corporation, Siti Networks Ltd and Zee Learn were sold in open market.
Sources said the promoters sold the shares in order to pay off lenders who were not part of the pact announced on January 27, under which 97 percent of the group's lenders agreed not to classify loans against pledged shares as "default".
On 25 January, Essel Group companies had come under massive selling pressure, plummeting up to 33 percent, and suffered a combined erosion of Rs 13,352 crore in market valuation.
On 26 January, Essel Group Chairman Chandra said his company is in a financial mess and has blamed the same for the aggressive bets on infra, which has gone out of control since the IL&FS crisis and also the acquisition of Videocon's D2H business.
Apologising to lenders, Chandra also said some negative forces are out to sabotage his efforts to raise money through a strategic sale in the flagship company Zee Entertainment Enterprises.
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Mutual fund houses ask SEBI to give more time to Essel Group's promoters to rope in strategic investors
Essel Group has sealed a formal agreement with its lenders including mutual funds and NBFCs, to get time till September to de-leverage or pare its debt
Essel group's promoter entities have sold shares worth over Rs 1,050 crore in six listed group firms in the open market between 25 January and 1 February, 2019
Aditya Birla Sun Life MF’s debt exposure in the form of loans against Zee group shares was to the tune of about Rs 2,700 crore