Subhash Chandra Sells 16.5 Per Cent Stake, Loses Control Of Zee Entertainment

Subhash Chandra-led cash-starved Essel Group on Wednesday said it is planning to sell a 16.5 per cent stake in its flagship ZEE Entertainment Enterprises to financial creditors to meet its loan repayment obligations. Of the 16.5 per cent planned divestment, the group seeks to sell 2.3 percent stake in ZEEL to OFI Global China Fund/ its affiliates. After these transactions, the overall holdings of the group in ZEEL will come down to 5 percent, of which the encumbered holdings of the group will come down to a low 1.1 percent of ZEEL," the company said in a statement. Essel Group entities hold 22.37 percent in Zee, of which over 90 percent or 21.48 percent, are pledged as collaterals against finances availed by them through NCDs.

After retiring a lot of debt, the Essel Group still have a debt of around Rs 6,000 crore. "Essel seeks to sell up to 16.5 percent stake in ZEEL to financial investors to repay loan obligations to certain lenders for whose benefit such shares are currently encumbered and who have consented to such share sale by it," the company said in a statement.

In September, the group had sold 11 percent in ZEEL to Invesco-Oppenheimer fund for over Rs 4,224 crore and then retired debt worth Rs 4,000 crore.

The Atlanta-based Invesco had already held 7.74 percent in ZEEL since 2002. The group was also reportedly in discussions with other buyers to sell another 7-8 percent stake and repay the lenders in full.

"The group is also working actively on further divestments, including its media/non-media assets and remains confident to complete the same," the statement said. The Subhash Chandra-led group has been facing liquidity issues since the beginning of the year forcing it to monetize a lot of its assets, including the promoters pairing a lot of their holdings.

The group is also working actively on further divestments including its non-media assets and remains confident to complete the same, it said.