Essel Group says formal consent from lenders to not declare default secured

The troubled Essel Group said Sunday it has secured a formal consent from lenders, having a pledge on shares held by the promoters in ZEE Entertainment Enterprises Ltd and Dish TV India Ltd, to not declare default till September 30, 2019 due to the movement in the stock price.

The consent was achieved during the second round of a detailed meeting between Essel Group Promoters and lending entities, the group said in a statement.

"As per the consent, the lenders have agreed that there will not be any event of default declared till 30th September 2019, due to the movement in the stock price of Essel Group's mentioned listed corporate entities," it said.

This consent provides the required amount of time to the group's management to complete the strategic sale of its key assets without any compromise on the value, it added.

"I am glad that the formal consent with the lenders has been achieved. For us, while their assurance given last week itself was more than enough, the formal consent seals and justifies their belief and trust in us and the intrinsic value of our assets," Essel Group chairman Subhash Chandra said.

"We are now positively focused on completing the strategic sale process, with the esteemed support of our lenders," he said.

Earlier last week, the group had confirmed that an understanding with the lenders was achieved.

In an open letter, Chandra had admitted that the group was in a financial mess and blamed it on aggressive bets on infra, which has gone out of control since the IL&FS crisis and also the acquisition of Videocon's D2H business.

His admission came after Zee shares tanked in stock markets.

He had, however, not disclosed the quantum of the debt, limiting himself to say that rolling over the debt has been difficult since the IL&FS crisis and the group has been able to honour its loan commitments till December.

He had assured the lenders to pay back debt once the strategic stake sale by promoters in ZEE, announced in November last year, is complete.

The proposed stake sale would halve the promoter holdings, but the group stated it was facing troubles from "negative forces" "hammering" the stock price.