Russian financial giant VTB Group has decided to sell their stakes in Zee Entertainment, reported The Economic Times. VTB’s investment arm VTB Capital, the report said, has begun the process to sell its 10.71 percent in Zee.
The process is being initiated, as per the report, to recover dues on loans given against promoter shares ‘pledged’ as security. Once the process is completed, the report added, media baron Subhash Chandra and his family’s stake in the flagship company will fall to single digits. This, in turn, may actually lead to the media baron losing control over the group.
VTB, the report said, has roped in JP Morgan and Citi for the share sale.
The development comes despite the claims by the Zee management that there is no risk of a VTB sale. Speaking to the media a Zee spokesperson was quoted saying that the lenders have “extended complete support to the promoters of the (Essel) Group, enabling them to complete the divestment process in the most optimal manner.”
However, the report said, the move by VTB move could further encourage some domestic lenders to join forces and sell the pledged shares as well. The domestic lenders, the report added are in discussions with the Zee management whether to transfer the promoter family’s pledged shares into an escrow account prior to any sale.
First Published: IST