The Zee Group stocks recovered some of their losses in trade today after 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 steep fall in share prices of listed entities such as Zee Entertainment and Dish TV.
The Zee Enterprises stock rose 14.29% to 365 in early trade compared to its previous close of 319.35 on the BSE.
The stock opened with a gain of 9.99% at 351.25 level on the BSE.
On Friday, Zee Entertainment Enterprises plunged 26.43 per cent to Rs 319.35 on the BSE.
Zee Learn which lost 18.49 per cent to Rs 27.55 on Friday hit an intra day high of 31 level in trade today before falling 5.81% to 25.95.
Zee Media Corporation was trading 11.76% lower at 19.50 compared to the previous close of 22.10.
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.
The 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.
The BSE on Friday sought clarification from Dish TV India with reference to news that a link has emerged between Essel Group and a company being probed for suspect demonetisation deposits.
Later in a clarification, the company said, "In this regard, we - Dish TV India Ltd, would like to state that there is no information by the company, which in our opinion needs to be reported to the stock exchange and which may have bearing on the stock price of the company. Further we would also state that the company is not aware of the alleged transactions mentioned in the said news report."
According to the Essel Group, its lenders have "showcased their belief" in the group firms ZEE Entertainment Enterprises 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.
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 (Friday) after market hours, 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.
Edited by Aseem Thapliyal