Essel Group repays half the debt to MFs & NBFCs

MUMBAI: Subhash Chandra’s Essel Group has repaid more than half its debt to mutual funds and non-banking finance companies, said a person familiar with the matter.

Last month, the Essel Group had raised ₹4,200 crore by selling an 11% stake in Zee Entertainment to global fund Invesco Oppenheimer.

Nearly ₹3,700 crore has been transferred to mutual funds and NBFCs on Friday, said the person.

An Essel Group spokesperson declined to comment.

About half a dozen fund houses have a total exposure of nearly ₹6,300 crore to the group, with shares of companies such as Zee, Dish TV and Essel Infrastructure as collateral.

Essel’s promoters had entered into an agreement with mutual funds, getting time till September 30 to repay debt. This agreement prevented the funds from selling the shares held as collateral. The agreement had affected pay-outs in the fixed maturity plans of Kotak Mahindra Asset Management Company and HDFC AMC. Aditya Birla MF has the highest exposure worth ₹2,500 crore. Others that hold Essel securities are HDFC Mutual, SBI Mutual, ICICI Prudential, Kotak and Franklin Templeton.