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Zee starts repaying lenders ahead of deadline; HDFC, ICICI other MFs get up to 60% money back

FE Online

Billionaire Subhash Chandra-promoted Zee Enterprises has reportedly started repaying its lenders ahead of the Sep 30 deadline as a part of its Rs 11,000 crore debt reduction programme. Notably, lenders including HDFC MF, ICICI Pru MF, Kotak Mahindra MF, ABSL mutual fund have received between 45-60% of the total outstanding dues, CNBC TV18 reported citing sources. HDFC Mutual Fund has received Rs 580 crore or 50% of the total outstanding amount. Aditya Birla Sun Life MF has received about 760 crore or 49% of the amount outstanding, the channel reported. ICICI Prudential MF has received the highest Rs 435 crore or 60% of the amount due, while Zee has paid Rs 599 crore to Kotak MF, which is 52% of its amount due. The amount paid to Kotak includes interest. Zee Enterprises had earlier said that all the lenders will be repaid in full by September 30th.

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In a bid to repay all the lenders by September 2019, the Essel Group had initiated the process of divesting its key assets, staring with a 11% stake sale to Oppenheimer. In August this year, Subhash Chandra-promoted Zee Enterprises announced a deal with Oppenheimer Developing Markets Fund to sell 11% stake for Rs 4,224 crore in a bid to pare Essel promoters’ Rs 11,000 crore debt. Taking stock of the development, global brokerage firm CLSA said that more assets are likely to be sold to pare debt further to repay the remaining Rs 6,800 crore worth debt.

A stake sale of further 8-18% in Zee Enterprises is likely to meet the debt, according to CLSA's estimates. In an interview to Financial Express, Zee Enterprises MD & CEO Punit Goenka said that the promoter’s liability in Eseel Group is Rs 11,000 crore while the rest is sitting in operating companies.

The development comes after Subhash Chandra had written an open letter expressing his apologies to the lenders for not being able to repay debt in January this year. Through his letter, the media baron Subhash Chandra assured of repaying each and every person. "We want to get rid of all the debt and not pay interest on it. I don’t want repeat of Black Friday — January 25 — happening ever again. We plan to retire the entire Rs 11,000-crore debt by September this year. This Rs 11,000 crore is against shares pledged," Punit Goenka,  MD & CEO at Zee Enterprises told Financial Express Online.