Lenders invoke pledged ZEEL shares

On Monday, when the indices were touching roof on account of cut in corporate tax, the stock of ZEE Entertainment (ZEEL) was bleeding red as lenders to the Essel group sold pledged promoters’ shares of ZEEL. As per media reports, it is SBI Mutual fund which invoked pledged shares in the company.

The transaction was executed by the Catalyst Trusteeship Limited. The Catalyst sold 72,50,000 shares at a weighted average price of Rs. 281.75, which translate to value of Rs. 204.3 crore. Earlier on 08 May 2019, the trustee had sold 86,00,000 shares at price of Rs. 342.33.

As on June 2019 ended quarter, the overall shares pledged by promoters were at Rs. 5,780.8 crore. In order to reduce its debt, the promoters had entered into agreement with Invesco Oppenheimer Developing Markets Fund to sale nearly 11 per cent stake in ZEEL.

The promoters’ stake in ZEEL had declined to 35.79 per cent as on June 2019 ended quarter from 41.42 per cent as on December 2018 ended quarter. The promoters had a deadline of 30th September 2019 to repay its debt but now it is seeking extension for this. If it fails to get extension, the stock is likely to witness further decline as lenders will start selling pledged shares.

The stock of ZEEL in Tuesday’s session is also trading in negative terrain. The stock which opened at Rs. 274.30 fell nearly 6 per cent to intra-day low of Rs. 256.10. But later the stock rebound and at 11.58 hours it was trading at Rs. 283.25, up by 4.1 per cent from previous close.