New Delhi: Essel Group chairman Subhash Chandra on Friday has declared that his company is now in a financial mess.
Apologizing to lenders, he alleged that some negative forces are sabotaging his efforts to raise money through a strategic scale in the flagship company Zee Entertainment Enterprises, India.com reports.
He also blamed the aggressive bets on infra, that went out of control after the IL&FS crisis and the acquisition of Videocon’s D2H business.
Incidentally, Chandra’s admission comes when Zee shares escalated to Rs 319.35 a whopping 26.43 percent rise on the BSE this Friday, while other company shares like Dish TV plunged 32.74 percent to Rs 22.60.
“I am compelled to apologize to our bankers, NBFCs and mutual funds, since I believe that I have not lived up to your expectations, despite the best of my intentions,” Chandra said in the letter, without disclosing the exact quantum of debt he owes, or if the group has defaulted on any debt servicing commitment so far.
He also urged his lenders not to react in “an anarchical manner and maintain patience” till the Zee Entertainments stake sale is completed.
“Post-sale process, we will be positively able to repay the entire dues, but if the lenders react in panic, it will only hurt them and us,” he said, adding that he intends not to keep a “single rupee” that he owes.
Meanwhile, Chandra has also claimed that he had achieved successes through meetings in London recently as an attempt to derail the sale process.
Chandra maintains that none of the operating firms of the group is facing trouble but only the promoters due to different business calls.
But he did admit to some of his mistakes he had made so far on Essel Infra.
He said wrong bets have caused losses to the tune of Rs 4,000-5,000 crore on Essel Infra alone.
“As most other infra companies, even we have made some incorrect bids. In usual cases, infra companies have raised their hands and have left their lenders with non-performing assets, but in our case, my obsession of not walking away from a situation, has made me bleed Rs 4000 crore to Rs 5000 crore,” he claimed.
He said the decision to acquire Videocon’s D2H business in November 2016 (completed in March 2018) had cost him and his brother Jawahar Goel a “fortune”.
The decision to take the debt of all group companies during the division of the family business was another “mistake” which only caused the debt to mount he said
He said he wrote a number of complaints to the police, Maharashtra home minister and Sebi since November 2018, but alleged none of this has yielded any result.
“I must also mention that there is no systematic protection against the insidious attacks on us by the mentioned negative forces, but we will continue to seek the support of the system to thoroughly investigate the matter,” he said.