Essel Group on Wednesday announced and confirmed that its lenders have unanimously agreed to extend the timeline, enabling the Group to optimize the value output from the sale of its assets.

On Tuesday, BusinessLine  had reported that Kotak Mutual Fund and SBI Mutual fund had offloaded their pledged shares , bringing down the promoter debt to ₹ 4,000 crore from ₹ 5,500 crore that their promoters had to pay.

"As per the official communication issued on September, 20 2019, the Group was in a steady and progressive dialogue with all the lenders. The mentioned extension of the timeline was requested purely in the interest deriving the true value of the precious assets of the group. The lenders have extended complete support to the Group and its promoters, recognising the intrinsic value of the assets and the overall asset divestment process are undertaken. The Group remains confident on further divestments including its non-media assets," Essel Group spokesperson said on Wednesday.

Zee stock was up 2.65 per cent on BSE on Tuesday from a 6-day long downward spiral.

Zee Entertainment had entered a standstill agreement with its lenders to extend repayment deadline to September 30. Zee has already returned about half of the ₹11,000 crore owed to lenders but is expected to miss the new repayment deadline. Mutual funds, therefore, have already started selling some of the pledged shares of Zee Entertainment.

The controversial standstill agreement earlier signed by the lenders, including mutual funds, allows Chandra to sell the pledged stake and credit the amount in the escrow account to repay the debt. Sources said the lenders might agree to extend the deadline given that the company has managed to repay some part of the debt. However, it is not clear if SEBI will allow an extension, given its recent objections to similar pacts.

In an earlier interview with BusinessLine, Zee Entertainment CEO Punit Goenka had said that his first preference was a strategic partner and a deal was almost done had it not been for the tight deadline of September 30.

With deadline extending to March 2020, Zee is expected to restart conversations for stake sale to strategic investors.

The Essel Group has already sold 11 per cent of its pledged shares in Zee Entertainment to raise ₹4,224 crore, besides selling its solar asset for ₹1,300 crore. It has, so far, received only part payment from both the deals.

Zee Entertainment stock was trading at Rs 281 on the BSE in afternoon trade, up about 0.70 per cent.

"This is definitely positive for the stock in near term as further pledges will not be invoked. In other words lenders will not sell their shares to recover the money as an extension has been received. Positive for the stock,"Jinesh Joshi, Research Analyst, Prabhudas Lilladher, said.

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