Essel Group is willing to explore multiple options to end the ongoing dispute between Yes Bank and Dish TV including buying back the shares held by the bank, merging Dish TV with one of the rival players such as Airtel and Tata Play, and appointing a mediator to resolve differences.
In an interview with BusinessLine, Subhash Chandra, Chairman, Essel Group, said, “The value of Dish TV shares today is around ₹1,200 crore. I am willing to pay that to buy back the shares held by Yes Bank. I am also ready for any third party doing valuation of my shares. Whatever they say is fair value, I am ready to buy it at that price.”
Chandra had pledged Dish TV shares, owned by his brother Jawahar Goel, as security for the credit facilities availed by Essel Group from Yes Bank.
The bank subsequently took ownership of these shares after Chandra failed to make repayments. While Yes Bank claims it has extended loans to the tune of ₹5,270 crore to 10 different Essel Group entities, Chandra said Essel group owes ₹4,200 crore to the bank.
Yes Bank currently owns about 25.6 per cent stake in Dish TV and has been pushing for a change in the management. Chandra said that the bank should decide if it wants to be a lender or it wants to be a controlling shareholder.
“If you want to be a shareholder then take over the company and run it, and the matter ends there. If you are a lender then it is a different conversation on working out a settlement. Here they want to be both. Jawahar Goel had offered to resign but they didn’t accept that either,” Chandra said.
The Essel Group chief further said the dispute was hurting DishTV’s business and the value erosion will further hurt all stakeholders.
Shrinking customer base
“Dish TV had a debt of ₹4,500 crore in 2019 and today the company’s debt is ₹350 crore. Over this two-year period, the company has paid off ₹4,000 crore in debt to all the lenders. But because it doesn’t have working capital, its base of 22 million shrunk to 20 million customers. Naturally, unless you invest you can’t stay competitive,” Chandra said.
When asked if he would be open to merging Dish TV with other DTH players, Chandra said he is open to such a deal but Yes Bank needs to give its consent. On the possibility of reaching an out of court settlement with Yes Bank, Chandra said that he is also exploring that option and is looking for a mediator.
Chandra’s Essel Group has been under financial stress over the past couple of years. The company has done asset sales across multiple group entities to reduce debt burden.
In August last year Chandra had said that the group has settled 91.2 per cent of the overall debt with 43 lenders, and the remaining dues are in the process of being paid.
Chandra acknowledged that he made the mistake of getting into the infrastructure sector too quickly.
“I kept getting into infra projects and kept borrowing. I accepted my mistake on day one. But after that I sold all my assets and gave money to everybody. Instead of appreciating this, some are making life difficult, issuing notices of wilful defaulter and fraud account. They have filed FIRs in 36 places. What exactly do you want?,” Chandra said.
When asked if the remaining debt will be paid by the end of this year. Chandra said that except for one or two accounts that have got stuck in legal issues, the remaining debt will be settled.
“I have not kept any assets with me which could be monetised and paid. There are only assets, one of them is solar and another one is a road project where there are some issues. If we are able to resolve these two cases then we can further repay ₹3,000 crore to the lenders,” Chandra said.
Chandra said although most of the lenders have been fair to him, the activism by some banks is hurting the stakeholders.
“If you take Dish TV’s case, you are not letting the company raise money which can be reinvested into the business, you are making other shareholders vote against various proposals but are not willing to take over the company’s management at the same time. So you are choking from every side, ultimately your share value will go down.” The Hindu BusinessLine