NEW DELHI: DEBT-ridden Essel Group said on Tuesday that it has completed the first tranche of a 11 per cent stake sale in its flagship Zee Entertainment Enterprises Ltd (ZEEL). The transaction saw ZEEL promoters selling 8.7 per cent in the company to US-based Invesco Oppenheimer Developing Markets Fund, with the remaining 2.3 per cent to be sold off over the next few days.
The transaction comes a few weeks after the group agreed to use its ZEEL stakes to raise funds towards settling around Rs 13,000 crore of debt. The 11 per cent stake sale in ZEEL is expected to provide the group around Rs 4,224 crore.
“This development reaffirms the group’s positive progress on its overall asset divestment approach undertaken, to generate adequate liquidity for the repayment process. The group is also working actively on further divestments including its non-media assets and remains confident to complete the same,” Essel said.
Post the stake sale, the promoters’ holding in ZEEL will come down to 24 per cent from around 35.79 per cent at the end of June, 2019. The group has been in hot water over the last few quarters due to heavy financial stress arising from high debt levels. The group’s head — Subhash Chandra — first announced that he would be selling half of promoters’ holding in ZEEL last November and followed it up with an admission of high financial stress late January.
Essel group has been in hot water
The Essel Group has time until the end of this month to pay back the amount owed to lenders, who had agreed to hold off from selling pledged promoters’ shares until September 31. The group has been in hot water over the last few quarters due to heavy financial stress arising from severe debt levels