Essel Group repays mutual funds after promoter stake sale


HDFC Mutual Fund, ICICI Prudential MF and Aditya Birla SL Mutual Fund have received payments from the Essel group after the promoters sold stake in Zee Entertainment Enterprises (ZEE) to repay lenders. The recovery is on loans that were given to Essel, with ZEE shares used as collateral.

In a filing with the stock exchange, HDFC Mutual Fund said it has received Rs 167 crore toward part repayment of debt instruments, along with interest. The outstanding exposure of HDFC MF to this debt reduced to Rs 13.7 crore from Rs 1,156 crore. ICICI Prudential AMC has received its entire principal of Rs 267 crore along with interest, while Aditya Birla Sun Life Mutual Fund has received Rs 840 crore.

“With this repayment, the aggregate market value of the outstanding exposure… which was Rs 1,156 crore as on March 31, 2019, stands substantially reduced to Rs 13.7 crore as on November 26, 2019, which is adequately covered by listed shares of DishTV India Ltd,” HDFC Mutual Fund said in a note to investors.

In the case of ICICI Prudential mutual fund, two open-ended schemes had exposure to the Essel Group, with ZEE shares used as collateral.

“Pursuant to the sale of shareholding by the promoters of ZEEL, the above schemes of ICICI Prudential Mutual Fund have received repayment of the total principal amount invested along with the accrued interest thereon. Subsequently, none of the schemes of ICICI Prudential Mutual Fund has any investments in debt instruments issued by the promoter group companies of ZEEL,” ICICI Prudential Mutual fund said in a statement to investors.

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A spokesperson at Aditya Birla SL Mutual Fund said it received Rs 840 crore, which included the interest accrued on the principal advanced.

However, three schemes of Aditya Birla SL Mutual Fund have exposure to Adilink Infra and Multitrading, an Essel group company that defaulted on loan repayment commitments. Aditya Birla Sun Life Mutual Fund has segregated Rs 787 crore of Adilink Infra & Multitrading debentures that its schemes held.





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