Zee Promoters'Loan against ZEEL Security Stands at Rs13,000 Crore: Report

IANS 30 January 2019

Economy & Nation

New facts have emerged at the recent lenders' meeting organised with Zee management. It has emerged that promoters' loans directly or indirectly against the security of their listed Zee Entertainment shares stand at over Rs13,000 crore, adding to the group's liability.

The break-up is: mutual funds Rs7,000 crore; NBFCs/banks Rs4,000 crore; offshore lenders Rs2,000 crore.

As per stock exchange filings, three Mauritius-based entities in the promoter group hold 12.5% stake in Zee Entertainment. They are Essel Media Ventures Ltd 10.7%, Essel holdings 0.2% and Ease International 1.5%, all of them forming part of promoter holding of 41.6%.

As per the filings, these Mauritius entities-held shares are unencumbered but promoters have told Indian lenders that these are not available for being provided as security for Indian lenders.

Hence, the current Zee Entertainments' security value for Indian lenders is Rs9,000 crore against loans Rs11,000 crore—which is obviously a huge deficit.

The Mauritius-held shares are directly or indirectly providing security for Rs2,000 crore offshore loans raised by promoters in the past.

No stock exchange disclosure has been made on any encumbrances/ restrictions on Mauritius held shares but the same are clearly restricted in some manner—else it is unthinkable that Indian lenders facing a huge shortfall in security cover would not demand these additional shares to make up the cover.

Annual interest liability on loans against promoters' shares is at over Rs1,100 crore for which there is no apparent source for payment other than Zee Entertainment cash flows.

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