Dish TV promoter Jawahar Goel pledges shares to rescue Essel group

Subhash Chandra says committed to release pledge; won't happen at lower price

Jawahar Goel, promoter and managing director of Dish TV, has offered a “substantial portion” of his equity in the firm as security for the credit facilities availed of by the Essel group, Subhash Chandra, chairman and group promoter, said on Thursday.
 
Chandra’s statement acquires significance as the group has struggled with debt for a while. Dish TV is a direct-to-home (DTH) company, and the stake of the promoter family – led by Goel, who is Chandra’s brother – stands at 7.3 per cent, BSE data shows.
 
However, this promoter stake has been pledged to lenders, who have been revoking shares — in just a year, the stake has fallen from nearly 55 per cent to 7.3 per cent. Consequently, pledged shares as a percentage of total equity have dropped to 3.74 per cent from 51 per cent.
 
Lenders such as YES Bank are now among the key shareholders in Dish TV, holding 24.2 per cent in the firm. Deutsche Bank, Housing Development Finance Corporation (HDFC), and IndusInd Bank hold 6.2 per cent, 4.7 per cent, and 3.8 per cent, respectively.
 
Chandra said he was committed to releasing the pledge offered by his brother and that it would not be done at a low price. “We wish to deny all the speculation pertaining to the shares being released at a lower price and sold to third-party investors at a higher price. This is baseless and incorrect. The (Essel) group has no such intentions whatsoever,” Chandra said.
 
“The group is also confident of returning the security cover back to Jawahar Goel and his family. Goel has only stepped forward to offer support, and has no financial stress whatsoever in his personal capacity,” Chandra added.
 
Last year, YES Bank had picked up 24.2 per cent in Dish TV after the latter defaulted on a loan. For the nine months ended December 31, 2020, Dish TV’s total debt stood at Rs 760 crore. The company is yet to release numbers for financial year 2020-21 (FY21). In FY20, Dish TV’s total debt stood at Rs 1,784 crore.
 
Last October, YES Bank was barred by the Delhi High Court from selling its stake in Dish TV after the latter approached the court. The injunction has stayed since then. Dish TV, in a letter to YES Bank, had said it had not pledged shares to it and that being a DTH licence holder, prior approval from the information and broadcasting ministry would be needed to effect a transfer of shares.