Essel stated: “The group seeks to sell up to 16.5% stake in ZEEL to financial investors, in order to repay loan obligations to certain lenders of the Group for whose benefit such shares are currently encumbered (and who have consented to such share sale by the Group). Out of the aforesaid, the Group seeks to sell 2.3% stake in ZEEL to OFI Global China Fund, LLC and/or its affiliates.”
Post this transaction overall holdings of the Group in ZEEL will be 5%, out of which encumbered holdings of the Group will reduce to 1.1% of ZEEL.
Essel added: “This development reaffirms the Group’s positive progress on its overall asset divestment approach, undertaken to generate adequate liquidity for the repayment process. The Group is also working actively on further divestments including its media/ non-media assets and remains confident to complete the same.”
The reports said that Essel Group chairman Subhash Chandra may lose control of ZEEL as lenders have decided to sell promoter shares pledged with them.
As reported earlier, Russian financial institution VTB Capital has already kick-started the process of selling 10.71% in ZEEL. The report noted that the second set of lenders is expected to transfer another 10.77% to the escrow account.
ZEEL’s ratings have been downgraded by Brickwork Ratings to BWR AA+ from BWR AAA for 6% Cumulative Redeemable Non-convertible (CRNPS) Preference Shares amounting to Rs. 1210.6 crore. The ratings continue to remain on Credit Watch with Negative Implications.