Mutual funds (MF) and non-banking financial companies have received part of the dues from Essel group. Among fund houses, sources say, ICICI MF, Aditya Birla Sun Life MF, HDFC MF and Kotak MF have received the payments from funds raised by the promoters’ stake sale in Zee Entertainment.
Industry sources say that ICICI MF received Rs 435 crore or 60 per cent of its outstanding dues. Aditya Birla Sun Life MF received Rs 760 crore, or half of its dues. HDFC MF received Rs 580 crore of its dues, which brought its debt exposure to group firms down by half. Kotak MF also received Rs 207 crore of dues; 52 per cent of the outstanding dues, sources added.
“The group wishes to confirm that the first tranche of the transaction comprising sale of 8.7 per cent stake in Zee Entertainment has been successfully concluded today (Tuesday). The group is confident of completing the balance sale of 2.3 per cent stake over the next few days,” Essel group said in a press note.
In July, the promoters had reached an agreement with Invesco Oppenheimer to sell upto 11 per cent stake in the company for Rs 4,224 crore.
The statement added that the group was in the midst of completing the operational formalities to conclude entire transaction at the earliest. The group is also working on further divestments, including in its non-media assets.
As part of the ‘standstill’ agreement with MFs and other creditors, Essel promoters have time till September-end to clear the remaining dues related to the loans-against-shares.
“We expect the promoters to meet their payment obligations before September-end. They can sell more stake in Zee Entertainment. Alternatively, this payment will reduce debt burden on the promoters. So, they can also look at possible avenues for refinancing,” said senior executive of a fund house, requesting anonymity.
Industry sources said that the payments being rolled-out to mutual funds and other lenders pertained to exposures where shares of Zee Entertainment were placed as collateral. Sources added that there were also few schemes where shares of other listed group firms were also part of collateral mix.
“While most fund houses had lent against Zee shares, few schemes had lent against a combination of Dish TV and Zee shares,” said a fund manager.
Industry insiders add that the fall in exposures would also improve equity cover of some fund houses on the remaining exposures. For instance, the new equity cover of ICICI MF improved to 1.58 times from 1.2 times.