No default so far, clarify Zee Entertainment promoters; stock gains

In a conference call on Monday morning, the management of Zee Entertainment (ZEEL) clarified there had been no default in repayment of loans by the parent Essel Group and that lenders had shown faith in the Indian promoters. 

The statement came after the Subhash Chandra-led Essel Group reached an agreement with lenders on Sunday in terms of servicing its debt. While pledge-holders sold off 60 basis points of promoter stake on Friday, lenders had agreed in a meeting on Sunday they would not sell any more shares even if their value fell, said ZEEL's MD Punit Goenka.

The ZEEL stock, which had fallen sharply on Friday, opened 9.9 per cent up on the BSE on Monday, trading at Rs 351, before shedding some gains to settle at Rs 338 per share.

Goenka also said that the moratorium for repayment of loans had been extended beyond April 2019 and that the agreement with lenders was a structured, time-bound and consolidated one. "There are no pledged shares at the international level and no further pledges have been given to lenders," he said.

Goenka also said that the stake sale process in ZEEL was on course and that there were multiple suitors for it. The decision rested with the company, he said, to tie up with the potential partner whose terms were the best, and that the company's focus was on completing the deal within April 2019.

In November, ZEEL had said that it was looking to offload half its promoter stake of 41 per cent to a global strategic investor. The process has since been opened to domestic investors too.

Apart from the ZEEL promoter stake sale, the Essel group has also put three infrastructure assets on the block, one of which is nearing completion in terms of a deal, Goenka said.

He added that there were no plans to downscale investment in ZEEL and that the team was focused on running the business.

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