Business

New facts emerge about lending to Zee

Punjab Tribune Bureau | January 30, 2019 01:29 PM

NEW DELHI: New facts have emerged at the recent lenders meeting organised with Zee management. It has emerged that promoters loans directly or indirectly against the security of their listed Zee Entt shares stand at over Rs 13,000 crore adding to the group's liability.

The break-up is: Mutual Funds Rs 7,000 crore; NBFCs/Banks Rs 4,000 crore; Offshore lenders Rs 2,000 crore.

As per stock exchange filings, three Mauritius-based entities in the promoter group hold 12.5 per cent stake in Zee Entertainment.

As per the filings, these Mauritius entities' held shares are unencumbered but promoters have told Indian lenders the same is not available for being provided as security for Indian lenders.

Hence, the current Zee Ent security value to Indian lenders is Rs 9,000 crore against loans Rs 11,000 crore - which is obviously a huge deficit.

The Mauritius-held shares are directly or indirectly providing security for Rs 2,000 crore offshore loans raised by promoters in the past.

No stock exchange disclosure has been made on any encumbrances/restrictions on Mauritius held shares but the same is clearly restricted in some manner - else it is unthinkable that Indian lenders facing a huge shortfall in security cover would not demand these additional shares to make up the cover.

Annual interest liability on loans against promoters' shares is at over Rs 1,100 crore for which there is no apparent source for payment other than Zee Entertainment cash flows.

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