Mumbai: The Essel Group which is the promoter of Zee Entertainment Enterprises Ltd (ZEEL) has told its investors that none of ZEEL’s shares were pledged to Russia's VTB Capital Plc, in the structured loan arrangement inked between the firms in September 2017. The development comes after both, VTB Capital Plc and Essel Group, disclosed to stock exchanges on Friday that ZEEL's promoters have created an encumbrance on 10.2 crore shares, translating to a 10.7% stake held by promoter entity Essel Media Ventures Ltd, in favour of VTB Capital.
According to exchange filings VTB Capital acted as a security agent on behalf of certain lenders, including VTB Bank (Europe) SE, Austria Branch, LLC VTB Capital Holding IB, under a structured arrangement pursuant to a loan agreement executed on 4 September, 2017.
The disclosure was made in accordance with the new Securities and Exchange Board of India (Sebi) disclosure norms on encumbered shares that came into effect on 1 October.
The new norms require every listed firm to disclose detailed reasons for pledging of shares by promoters along with the amount of stake pledged within two days, if the total amount of shares pledged by the promoter or the promoter group crosses 50% of the total stake held by the promoter, or if it is more than 20% of the concerned company’s total share capital.
However Punit Goenka, chief executive officer of ZEEL told investors, which include several domestic mutual funds in a conference call on Saturday that that VTB Capital has not invoke any of those pledged shares, two people directly aware of the discussions told Mint requesting anonymity. Goenka, according to the persons cited above said in the call that the loan sought from VTB Capital, was always included in the total loan against shares disclosed to the market.
In the call Goenka also said that 90% of the current 22% of the promoter shareholding of ZEEL was pledged and the number of pledged shares have increased compared to the data as on June 30, when it stood at nearly one-third of promoters' 35.79% shareholding in the company, translating to a pledge of over 210 million shares.
Promoters of Essel Group have a debt of ₹11,000 crore. Essel Group companies together owe another ₹11,400 crore separately.
To repay the debt, the promoters recently agreed to sell an 11% stake in Zee Entertainment Enterprises Ltd, the group’s flagship media and entertainment firm, for ₹4,224 crore to US-based Invesco Oppenheimer Developing Markets Fund. In October 2018, Essel Infra sold two operating power transmission assets to Sekura Energy Ltd, backed by Edelweiss Infrastructure Yield Plus fund.
In August, Mint reported that Essel Group agreed to sell 205 megawatt (MW) of its operational solar energy assets to Adani Green Energy Ltd at an enterprise value of ₹1,300 crore.
Goenka, the person said, also clarified that existing promoter debt stood at ₹5,000 crore, including the loan from lenders represented by VTB Capital. He also told investors that ZEEL’s promoters were confident of repaying their debt within three months through asset divestment, much head of the six-month extension given to them by lenders.