VTB Capital secures right to sell 10.71% stake in ZEEL

MUMBAI: VTB Capital, the investment management arm of Russia-based state-run financial services giant VTB Group, has said it has secured the right to potentially monetise 10.71% stake in Zee Entertainment Enterprises Ltd. (ZEEL) held by Essel Media.

“Pursuant to its rights under the (loan) facility, and upon instruction from the lenders, VTB Capital has enforced certain security rights granted to the lenders in order to protect the interests of the lenders in accordance with the terms of the financing arrangement,” said VTB Capital in an exchange filing.

“This action included obtaining certain lender protection rights in Essel Media Venture and thereby securing the right to potentially monetize, if required, 10.71 per cent stake in Zee held by Essel Media Venture.”

Essel Media is a subsidiary of Subhash Chandra-promoted Essel Group and is the largest promoter group entity with a 10.71% stake in ZEEL. The total promoter holding in Zee is 22.37%. Earlier, VTB Capital had disclosed that Essel Media stake in ZEEL was pledged with it against a loan facility entered in September 2017.

It also said that it would willingly cease all enforcement action and release the encumbrances upon repayment of the amounts outstanding under the facility. “We are hoping to reach a satisfactory resolution with the obligors/promoters.”

VTB Capital is the security agent on behalf of certain lenders namely VTB Bank (Europe) SE, LLC VTB Capital Holding IB, and VTB Bank (Europe) SE. “The lenders will act in accordance with their contractual rights and in compliance with applicable law,” the BSE filing added.

ZEEL MD and CEO Punit Goenka had earlier disclosed that over 90% of the promoter holding in the company was pledged. Goenka had also said that VTB Capital’s pledging was not a direct one. He also added that these disclosures were made due to SEBI’s new norms on such disclosures.

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