Essel group makes partial repayment to mutual fund houses
Essel Group raised Rs 4,200 crore by selling 11% in Zee Entertainment to global fund Invesco Oppenheimer.
Earlier in the year, mutual funds and other lenders had entered into a ‘standstill’ agreement with promoters of Essel Group to give them time till September to repay their dues. The agreement met with widespread criticism from investors. Even Sebi frowned upon the unilateral agreement made by fund houses with certain promoters.
In April this year, investors in six fixed maturity plans (FMPs) of Kotak Mutual Fund maturing between April 8 and May 31 did not get back their entire money on account of delay in repayment by Essel. HDFC Mutual Fund gave unitholders the option to roll over or extend the maturity by 380 days instead of redeeming at maturity in mid-April.
Aditya Birla Mutual Fund received the highest sum of Rs 760 crore out of the total Rs 2,500 crore due.
ICICI Prudential Mutual Fund received Rs 435 crore, 60 per cent of the total outstanding amount. Their recovery was the highest in terms of percentage of the outstanding sum.
HDFC Mutual Fund received Rs 580 crore out of Rs 1,200 crore due and Kotak Mutual Fund received Rs 599 crore, including interest payments.
Subhash Chandra’s Essel Group raised Rs 4,200 crore by selling 11 per cent in Zee Entertainment to global fund Invesco Oppenheimer last month. It was expected that Zee will pay around Rs 2,600 crore to mutual funds out of this money.