Zee Enterprises plan to repay all debt by September

Updated: Aug 01, 2019 7:15 AM

Zee Enterprises MD & CEO Punit Goenka tells FE’s Malini Bhupta that if the need arises he is open to selling some more stake, but does not want a repeat of Black Friday.

Zee Enterprises MD & CEO Punit Goenka

Zee Enterprises MD & CEO Punit Goenka tells FE’s Malini Bhupta that if the need arises he is open to selling some more stake, but does not want a repeat of Black Friday. Excerpts:

What is the road ahead after today’s announcement?

We will get into aggressive negotiations for our non-media assets, which would include the financial services portfolio, solar assets and roads assets. We have non-binding offers for our solar and roads assets. The roads deal can be wrapped up quickly so that we can meet the timeline of September 30, 2019. We had agreed with the lenders to stick to this timeline.

Why are you in a hurry to make a bullet payment since a large part of the mutual fund debt matures in two years?

We want to get rid of all the debt and not pay interest on it. I don’t want repeat of Black Friday — January 25 — happening ever again. We plan to retire the entire Rs 11,000-crore debt by September this year. This Rs 11,000 crore is against shares pledged.

What are Essel Group’s overall liabilities?

The promoter’s liability is Rs 11,000 crore while the rest is sitting in operating companies. The debt on those operating companies will go with the stake sale of the assets.

So CDPQ seems to have walked away from the roads deal. What happened?

The deal didn’t go ahead with CDPQQ but that conversation was for three road assets, now we are in talks with a strategic investor who is interested in all six road assets.

Oppenheimer holds 18.8% in Zee so why is it that they didn’t want a board seat even in the company?

You know Oppenheimer is a public fund and the moment they come on the board, they become privy to insider information. And this restricts them from selling in the open market. Also, the fund has been an investor in Zee for over 17 years and I have personally dealt with the fund manager for 14 years. They have never exited the stock. They understand the management will work towards building value and that’s how they are seeing the promoters.

You say that you want to retire all your Rs 11,000-crore debt by September 2019. Will non-media assets generate Rs 7,000 crore?

A year ago I would have said, yes. But yes, I do expect a significant part of this amount to come non-media divestments. But if I have to top it up with more stake sale in Zee, then so be it.

Your stake is already below 25%. Will you be able to retain control if your stake goes below the current levels?

The stake issue of control through equity is an old school thinking I think. I know enough companies that are run by promoters with less than 5% economic interest.

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