A little over 90 per cent of the promoters’ 22 per cent shareholding in Zee Entertainment is pledged with financial institutions. This was disclosed by Zee Entertainment Managing Director and Chief Executive Officer Punit Goenka in an investor call on Saturday. Following the agreement to sell an 11 per cent stake to Invesco Oppenheimer in September, the promoters’ loan against shares stands at Rs 7,000 crore, as against Rs 13,500 crore on January 26, 2019.
Of the 11 per cent, the promoters have managed to sell 8.7 per cent and are in talks with Invesco Oppenheimer to sell the balance 2.3 per cent. The Zee management indicated that the delay in closing the balance sale was due to restrictions on insider trading window. Some lenders have also invoked the pledge and sold shares in the market, reducing the promoters' stake further. At the end of the June 2019 quarter and prior to the deal with Invesco, the promoter holding in the company was 35.79 per cent and about 64 per cent of it was pledged.
The management indicated that they were committed to paying off the loan against shares over the next three months both from the sale of the group’s media and non-media shares, even as no loans are due within this period. On Friday's disclosure by Russia’s VTB Capital that the promoters have pledged 10.71 per cent with it, the Essel group indicated that the company had disclosed the same as part of the overall pledged shares. The 10.71 per cent stake held by promoter entity Essel Media Ventures in Zee Entertainment is pledged with VTB Capital. The Russian lender disclosed its ownership as new Sebi guidelines applicable from October 1 require indirect pledge details to be disclosed. The maturity of the loan from VTB Capital is a year from now, according to Goenka.
VTB Capital is the only offshore lender to the promoters and accounts for Rs 2,000 crore of the outstanding loan against shares while the rest (Rs 5,000 crore) is due to domestic lenders, he added.