Financial woes of media group Zee's promoter Subhash Chandra are unlikely to ease anytime soon as his brother Ashok Kumar Goel says the Rs 2,157 crore payout his Ashok Goel Trust will receive from the sale of 51 percent stake in Essel Propack will not be available for paying off creditors of his sibling's group.
Blackstone will buy the shares of Essel Propack from Ashok Goel Trust at the rate of Rs 134 per share, according to a media report. The promoter and promoter group led by Goel holds 57.03 percent shares as on March 31, 2019. Blackstone has said that it will initially buy 51 percent stake from Ashok Goel Trust and will go for an open offer in a bid to acquire an additional 26 percent stake in the firm at Rs 139.19 per share, according to a report in Financial Express.
Goel, however, said that the amount the Trust received from Blackstone would not be used by his brother Subhash Chandra to pay back lenders to Essel Group, according to a report in CNBC TV18. Ashok Goel Trust is not financially or commercially a part of the Essel Group, according to Goel. "If you talk as a family, we are one single family, we are a strong family and we care about each other. But there is no financial or commercial relationship with each other and there is no cross-holding whatsoever," the report quoted Goel as saying.
Essel Propack manufactures laminated plastic tubes, extruded laminated plastic tubes, caps and closures and flexible laminates used in packaging of oral care products, cosmetics, food and pharmaceuticals. Its major customers in India include Dabur, Patanjali, Godrej, Emami, Vicco, Marico, Sun Pharma, Dr Reddy's and Piramal.
Essel Propacks' shares opened on Tuesday at Rs 135 on the news of the deal after having closed at Rs 132.55 on Monday. By around 3 pm, profit booking brought the share down to around Rs 133. As Blackstone will make an open offer for 26 per cent more stake in Essel Propack at Rs 139.19 per share, the deal finally may be valued at Rs 3,211 crore (or, approximately $310-462 million), the report says.
Subhash Chandra, meanwhile, said on Monday that he intended to repay all his group's debt which some estimates say totals Rs 17,000 crore. He was confident of meeting the September 30 deadline set by his creditors and said without elaborating that he had offers to buy the assets of his companies from major groups from India to Japan and the US to Europe.
Shares of Zee Media Corporation Limited (ZEEMEDIA) and Zee Entertainment Enterprises Limited (ZEEL) gained in early trade but withdrew from the day's highs. ZEEMEDIA was trading at Rs 15.05 around 3 pm after coming off an intra-day high of RS 15.50 and ZEEL was at Rs 409 after receding from a high of Rs 421.