New Delhi: 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, for paying off lenders who were not part of an agreement to prevent 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 27 January, under which 97 per cent of the group’s lenders agreed not to classify loans against pledged shares as ‘default’. When contacted, Essel Group spokesperson said: “Essel group confirms the mentioned information, which is as per regulatory filings”.
According to a series of regulatory filings, Essel group raised an amount of Rs 874.11 crore through sale of stake in its flagship firm Zee Entertainment Enterprises by its promoter entities Cyquator Media Services Pvt Ltd and Essel Corporate LLP selling 1.69 per cent and 0.85 per cent stake, respectively, between 25 January to 1 February.
Other promoter group firms World Crest Advisors LLP (0.86 per cent), Direct Media Distribution Ventures (0.80 per cent) and Veena Investments Pvt Ltd (0.35 per cent) sold shares worth Rs 97.34 crore in Dish TV during the period. In Zee Media Corporation, ARM Infra & Utilities Pvt Ltd (2.38 per cent) and 25FPS Media Pvt Ltd (3.09 per cent) sold shares worth Rs 45.05 crore.
Transaction value has been calculated based on weighted average price of the stock on the day of sale and the number of shares sold.
On Sunday, the Essel group said it had sealed a formal agreement with its lenders, under which it gets time till September to de-leverage or pare its debt. The agreement was with those lenders who have taken pledged shares of the group flagship and listed entities, Zee Entertainment Enterprises and Dish TV India.
On 25 January, Essel group companies had come under massive selling pressure, plummeting up to 33 per cent, and suffered a combined erosion of Rs 13,352 crore in market valuation.
The next day, Essel group chairman Subhash Chandra said his company is in a financial mess and blamed it on aggressive bets on infra.