The troubled Subhash Chandra-led Essel Group is banking on an extension of the standstill agreement entered into with its lenders to repay its remaining debt of ₹5,500 crore. The repayment deadline is September 30.

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 may agree to extend the deadline given that the company has managed to repay some part of the debt. But it is not clear if SEBI will allow an extension, given its recent objections to similar pacts.

The Essel Group recently 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.

Arbitration order

In a related development, a Delhi High Court-appointed arbitrator has asked Chandra not to sell his unpledged stake in Zee Entertainment Enterprises till next month in an ongoing dispute with Indiabulls Housing Finance over default in repayment of loans worth ₹200 crore. Both Essel Group and Indiabulls Housing have made claims against each other and are locked in a legal battle.

An Essel group company spokesperson said the arbitration proceedings between Essel Group and Indiabulls Housing Finance do not have any bearing on the ongoing pledged stake sale of Zee Entertainment shares.

Reacting to the arbitration order, shares of Zee Entertainment dipped 8 per cent to ₹309, close to the day’s low of ₹306. Among other group companies, Dish TV India was down 8 per cent at ₹20, Essel Propack slipped 1 per cent to ₹104.