Zee's lenders have recovered nearly 50 percent of their outstanding dues, reports suggest
The move comes in the backdrop of Essel Group’s announcement on September 25 that its lenders have unanimously agreed to extend the repayment timeline, enabling it to optimise the value output from the sale of its assets
Sources told Moneycontrol that Essel Group has received a six months extension to repay dues from Aditya Birla Asset Management Company, HDFC AMC, Franklin Templeton AMC, and three others.
In July, Essel Group sold an 11 percent stake in ZEE Entertainment to Invesco Oppenheimer Developing Markets Fund in a deal worth Rs 4,224 crore.
Two of the prospective on-sale projects are already operative while two are under construction
The deal is likely to be sealed at 17 percent to 20 percent premium over the last six months’ average market value.
Most investors in close-ended debt schemes are corporate treasuries and institutions; retail investors have a negligible presence in closed debt schemes.
In 2016, Franklin Templeton India AMC had bought the troubled Jindal Steel and Power Ltd's debt securities from its debt schemes after these papers were downgraded twice earlier that year.
A side-pocketing is a diligent and tedious exercise. It needs segregation of illiquid and good assets, and two segment NAVs in the scheme till it is resolved.
Essel Group is facing a cash crunch and is looking to sell most of its assets to reduce debt on its books.
Withholding payment pending recovery of money in a closed-end, fixed tenured product such as FMP violates the spirit of the product itself.
Six fund houses chose a standstill agreement with Subhash Chandra promoted Essel group, for which the rescheduled repayment debt is now slated in September 2019.
Kotak MF said its exposure to Essel Group remained in six fixed maturity plans (FMPs) and in Kotak Credit Risk Fund to an extent of 0.37 percent of its assets under management.
Fund houses are caught in a trap of their own making
"A term sheet has been signed between both the parties so far which is a part of due diligence process," a source told Moneycontrol.
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.
If an entrepreneur runs a highly successful business, it doesn't necessarily follow that she will do equally well in a completely unrelated industry.
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.
Zee Entertainment Enterprises shares plunged 33 percent intraday on January 25 to hit the 44-month low of Rs 288.95.
Zee, however, confirmed that the Serious Fraud Investigation Office (SFIO) had asked for documents related to "certain transactions" in July-august 2018 from Essel Group entities and the company had provided the same
The company in January 2019 had reported exceptionally good results for the December 2018 quarter.
Controversies and allegations are not new for Zee promoter Subhash Chandra. But every time, Chandra has managed to forge ahead. Will he succeed this time too?
Rumour is rife that Zee may divest at least 20 per cent in its OTT business. Speculations also say that the investor will o be offered up to 20.8 per cent in Zee Entertainment.
Zee needs to evolve to capitalise on its strengths and be ahead of the curve. That’s where a strategic partnership in the areas where it doesn’t have core competencies would help