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Business News/ Companies / News/  Yes Bank asks Bombay HC to restrain Zee promoters from selling further stake
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Yes Bank asks Bombay HC to restrain Zee promoters from selling further stake

Essel group, which includes ZEEL, owes ₹8,000 crore to Yes, which itself is in the middle of a rescue plan
  • According to the Yes Bank petition, Essel group company Living Entertainment Ltd (LEL) borrowed $50 million from Yes Bank in 2016 to buy shares in its unit, Veria International
  • Essel group which includes ZEEL owes as much as ₹8000 crore to Yes Bank. (Bloomberg)Premium
    Essel group which includes ZEEL owes as much as 8000 crore to Yes Bank. (Bloomberg)

    Almost a year after promoters of Zee Entertainment Enterprises Ltd (ZEEL) sold an 11% stake in the company, Yes Bank Ltd has moved the Bombay high court to restrain the controlling shareholders from selling more ZEEL stock and stopping managing director Punit Goenka from leaving India.

    Essel group, which includes ZEEL, owes as much as 8,000 crore to Yes Bank, which itself is in the middle of a complicated rescue plan.

    According to the Yes Bank petition, Essel group company Living Entertainment Ltd (LEL) borrowed $50 million from Yes Bank in 2016 to buy shares in its unit, Veria International. Promoter Goenka had provided guarantees for the loan. Separately, LEL entered into a put option agreement with another group firm: ATL Media. Both LEL and ATL are based in Mauritius. While LEL procures and supplies health and wellness content, ATL operates 35 TV channels outside India in 170 countries.

    Under the put option, if the promoter stake in Zee fell below 30%, ATL must buy up to a 64.38% stake that LEL holds in Veria International, and also repay the loan. After this agreement was made, LEL assigned all its rights, titles and interest under the put option in favour of the trustee on behalf of Yes Bank as additional guarantee for the $50 million loan, along with Goenka’s guarantee.

    According to Yes Bank, after the promoters sold an 11% stake in ZEEL to Invesco Oppenheimer Developing Markets Fund on 31 July 2019, their stake in ZEE fell below 30%, breaching the LEL-Yes Bank loan agreement. However, when Yes Bank invoked the put option, ATL declined to purchase the committed 64.38% stake in Veria and transfer $52.5 million to repay the loan. Additionally, Yes Bank also sought an injunction restraining Goenka from leaving the country.

    Responding to a query from Mint, a spokesperson for ZEEL said, “Hon’ble Mumbai high court has declined interim reliefs sought by the bank today".

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    ABOUT THE AUTHOR
    Gopika Gopakumar
    Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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    Published: 01 Jul 2020, 05:40 AM IST
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