Mumbai, Feb 4 (IANS): The Zee Entertainment Enterprises Ltd (Zeel) promoter Essel Group has secured the formal consent of its lenders to whom the shares held by Essel have been pledged, the latter announced.
A late Sunday announcement by the Subhash Chandra-led Essel Group said the formal consent has been received following a meeting on the day with lenders, to the understanding reached last week which has now been finalised.
"As per the consent, the lenders have agreed that there will not be any event of default declared till September 30, 2019, due to the movement in the stock price of Essel Group's mentioned listed corporate entities.
"This consent provides the required amount of time for the Group's management to complete the strategic sale process of its key assets without any compromise on the value," it said.
"During the meeting, the management of Essel Group once again reassured the lending entities that within the mentioned time frame, a complete resolution will be achieved, leveraging the stake sale process."
The lenders have a pledge on shares held by the promoters in Zeel and Dish TV India.
Commenting on this development, Essel Group Chairman Subhash Chandra said: "For us, while their assurance given last week itself was more than enough, the formal consent seals and justifies their belief and trust in us and the intrinsic value of our assets."
The Zeel stocks hit the circuit breaker on the BSE Sensex on Monday after Chandra said the company management had successfully arrived at an understanding with lenders.
After a media report last week said that the Zee promoter Essel Group was involved in money laundering in the aftermath of the November 2016 demonetisation, the shares of the company's entertainment arm had tanked over 30 per cent and the firm suffered a market capitalisation loss of Rs 14,000 crore.
Zeel, however, clarified that it has no connection with any of the transactions said to have been carried out by its promoter Essel Group, as alleged in the media report.
In an "open letter" on Friday, Chandra apologised to bankers, NBFCs and mutual funds for "not having lived up to their expectations" and being in debt due to the failure of multiple infrastructure projects, and said that he intended to pay back the loans through the sale of his promoter stake in Zeel.