The Subhash Chandra-led Essel Group on Sunday said it has "arrived at an understanding" with its lenders, which are having pledge on shares held by the promoters, not to be declared defaulter following any steep fall in share prices of listed entities such as Zee Entertainment and Dish TV.
The promoters of the Essel Group had a detailed meeting with the lending entities comprising mutual funds, non banking financial companies (NBFCs) and banks, in which it was decided that there would not be any event of "default declared due to the steep fall in price", the Essel Group said in a statement.
This development comes two days after shares of ZEE Group companies had come under massive selling pressure, plummeting up to 33 per cent, and suffered a combined erosion of Rs 13,352 crore in market valuation on January 25.
According to the Essel Group, its lenders have "showcased their belief" in the group firms ZEE Entertainment Enterprises Ltd. and Dish TV.
"As a result of the above, there will be synergy and co-operation, amongst lenders leading to a unified approach. Lenders drew comfort from reiteration by the promoters for a speedy resolution through a strategic sale in a time bound manner," the statement said.
Commenting on the development, Essel Group Chairman Subhash Chandra said, "I am pleased to share that we have achieved an understanding with lenders. We have always valued their immense trust and faith sown in us and the positive and progressive outcome of the meeting, is a true example of the same. I am very positive, that we will continue to take such positive steps in rising up from the current challenging times, with support of all stakeholders."Aditya Birla Sun Life AMC CEO A Balasubramanian said, "We have always believed in the intrinsic value of ZEE Entertainment and most above, the sheer value system with which its promoters function. I am very glad with the outcome of the meeting, which enabled us to arrive at a consensus, in the interest of all stakeholder."
On January 25, Chandra had apologised to lenders and said his company was in a financial mess and blamed the same for the aggressive bets on infra, which had gone out of control since the IL&FS crisis and also the acquisition of Videocon's D2H business.
Chandra also alleged that some negative forces are out to sabotage his efforts to raise money through a strategic sale in the flagship company Zee Entertainment Enterprises.