In the month of September, several mutual funds had received around Rs 2,000 crore from the Essel group after the company announced the successful completion of the first tranche of Zee Entertainment Enterprises Ltd’s (ZEEL) stake sale to Invesco Oppenheimer Developing Markets Fund.
Promoters of the debt-ridden Essel Group have denied reports on the transfer of pledged shares by the lenders to an escrow account. Zee Entertainment in an exchange filing has clarified that it has not been informed anything by the lenders that requires mandatory disclosure. FE spoke to two fund houses, which have high exposure to Essel Group’s loans against shares (LAS), and they have also denied the transfer of promoters shares to the escrow account.
“None of the lenders are selling any shares and have extended complete support to the promoters,” said the company spokesperson. Over 90% of the promoter’s stake in Zee Entertainment, which stands at 22.37%, has been pledged to lenders. The promoters are in talks with all lenders, including VTB Capital, to arrive at the best resolution, said the spokesperson. VTB Capital can sell its 10.7% stake in the company if it wishes, for which it obtained the rights on October 15.
On Monday, the stock of Zee Entertainment ended at Rs 296 down by Rs 13.50 or 4.36% on BSE. In the month of September, several mutual funds had received around Rs 2,000 crore from the Essel group after the company announced the successful completion of the first tranche of Zee Entertainment Enterprises Ltd’s (ZEEL) stake sale to Invesco Oppenheimer Developing Markets Fund.
Aditya Birla Sun Life AMC had received Rs 765 crore, HDFC AMC Rs 580 crore, ICICI Prudential AMC and Kotak Mahindra AMC Rs 434 crore and Rs 208 crore, respectively. The data from Value Research shows that mutual funds collectively hold Rs 5,220 crore worth of shares as on June 2019.
Later, Kotak Mahindra Mutual Fund had sold stocks worth Rs 190 crore, which were pledged with the fund house and paid back to the investors of six Fixed Maturity Plans (FMP) which had exposure to Essel group companies.
Earlier in May this year, Reliance Nippon Life Asset Management had sold shares of Zee Entertainment worth around Rs 400 crore that the Essel group promoters had pledged with the fund house.
The promoters of Essel Group have been in touch with the potential investors and lenders without the involvement of the company, according to the exchange filing.