Shares of Zee Entertainment
Enterprises (ZEE) continued to remain under pressure at the bourses and slipped 3 per cent to Rs 184 on the BSE on Tuesday. The stock has now fallen 8.5 per cent in the past two trading days, after media reports indicated that Siti Networks has defaulted on loan amount of Rs 400 crore against which ZEE has given corporate guarantee of Rs 116 crore.
The broadcasting & cable TV operator's stock was trading lower for the fifth straight day. In the past week, it has slipped 15 per cent, as compared to 4.7 per cent rise in the benchmark S&P BSE Sensex.
“The company is more than 30 days behind payment of principal and interest amount of Rs 404 crore”, Siti Networks informed exchanges on October 7. The Company is in discussions with its bankers for restructuring of its debt obligations, it said.
“Given that legality of corporate guarantee provided by Zee, we believe Zee will have to honour the agreement and provide partial default amount. This is negative on the sentimental as well as corporate governance front,” ICICI Securities said in a note.
Meanwhile, on August 7, rating agency Brickwork Ratings India Private Limited ('Brickwork') had downgraded the rating of the company’s 6 per cent Cumulative Redeemable Non-Convertible Preference Shares & the Issuer rating. The downgrade in the rating factors decline in profitability and margins for the year ended FY20, reported loss at the operating and net level for Q4FY20 and weakening credit profile, ZEE said in a exchange filing.
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