Brickwork downgrades Essel Group’s NCDs worth Rs 425 crores to ‘BBB-‘

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Published: August 20, 2019 5:54:38 AM

Zee Entertainment Enterprises (ZEEL) promoters informed the stock exchanges on July 31, 2019, that Invesco Oppenheimer Developing Markets Fund (IODMF; existing investor in ZEEL for 7.74% stake) has agreed to buy up to 11% stake in ZEEL for a consideration value upto Rs 4,224 crore, which will be utilised by the promoters to repay the partial debt raised by promoter held entities against pledge of shares.

Brickwork, Essel Group, NCD, BBB-, rating, industry news, ZEEL, Zee Entertainment EnterprisesEssel Infraprojects is the infrastructure arm of the Essel Group with interest in road projects, urban infrastructure, power, water management and solid waste management.

Essel Infraprojects’ non-convertible debentures’ (NCDs) issue of Rs 425 crore have been downgraded by Brickwork Ratings to ‘BWR BBB-’ from ‘BWR BBB’, continuing to be on credit watch with negative implications. The ratings agency has also downgraded NCDs of Rs 250 crore of Essel Corporate Resources.

The Bengaluru-based rating agency stated that the rating of the NCD issues have been downgraded on account of delay in completion of the binding term sheets for the total outstanding debt raised against pledge of shares which was expected to be completed fully by July 31, 2019, volatility in share price, thereby impacting the security cover, delay in disinvestment and deteriorating credit profile of the groups infra segment, and resultant weakening of the financial flexibility of the group, it said in a statement.

Zee Entertainment Enterprises (ZEEL) promoters informed the stock exchanges on July 31, 2019, that Invesco Oppenheimer Developing Markets Fund (IODMF; existing investor in ZEEL for 7.74% stake) has agreed to buy up to 11% stake in ZEEL for a consideration value upto Rs 4,224 crore, which will be utilised by the promoters to repay the partial debt raised by promoter held entities against pledge of shares.

“The promoters have not finalised the deal as planned within the time frame indicated earlier and the additional stake sale for raising the amount required to take care of repayment of the balance debt is yet to be finalised though the promoters have announced that the entire debt is likely to be paid by September 30, 2019,” the ratings agency said.

Essel Infraprojects is the infrastructure arm of the Essel Group with interest in road projects, urban infrastructure, power, water management and solid waste management. Essel Corporate Resources (ECRPL) is one of the primary holding companies of Dish TV India promoted by Subhash Chandra. Ashok Balvantrai Sanghavi and Basant Sharma are the directors of the ECRPL.

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