Essel Group puts its MF business on the block

Mumbai: The Essel Group has put its mutual fund business on the block in its drive to monetise nonmedia businesses amid concerns over debt repayment, said three persons with direct knowledge of the development.

Srei Mutual Fund Asset Management, Avendus Capital and Lodha Ventures Holdings are currently in the race to acquire Essel Mutual Fund, which has Assets Under Management (AUM) worth about Rs 1,428 crore, in a deal estimated to be valued at around Rs 100 crore.

“The deal talks have reached the final stages and are expected to be concluded over the next few weeks,” said one of the persons mentioned above.


ET’s separate email queries to Lodha Ventures and Avendus Capital remained unanswered till the time of going to press. Spokespersons for Essel Group and Srei Mutual Fund Asset Management declined to comment on the story.

In 2016, Essel Finance Wealth Zone Private Ltd (EFWZ), a whollyowned subsidiary of Essel Finance Management LLP, had acquired the entire shareholding of Essel Finance AMC, formerly Peerless Funds Management Company, and Essel MF Trustee Limited formerly Peerless Trust Management Company.

At the group level, Essel has total debt of Rs 17,174 crore and out of this, Rs 11,466 crore is the infra-related debt. This infra-related debt covers three major verticals -- power transmission, solar and roads (toll and annuity).

On January 31, ET had reported that from non-media business, the company plans to monetise about Rs 20,000 crore over the next 6 months by selling its infrastructure assets.

Promoters of Essel Group are already in talks with multiple companies, including Sony Pictures and Comcast, to sell up to 50% of their holding in Zee Entertainment Enterprises. The Subhash Chandra-promoted group has also started working on a plan to monetise its non-media businesses in order to pare debt.

Apart from repaying its infrastructure-related debt, the company is planning to use the funds raised through asset monetisation to reduce the pledged portion of the promoter shares in Zee Entertainment Enterprises. The promoters had pledged their 59% stake in Zee Entertainment to raise money that served as equity funding for the group’s infrastructurerelated businesses.

Last week, in a separate development, Delta Corp announced entering into an agreement to invest $10 million in Jalesh Cruises Mauritius Ltd, an Essel Group company. This transaction is expected to be completed in one or more tranches, on or before June 30.

According to the regulatory filing by Delta Corp, the investment to be made through its subsidiary Gaussian Software will entitle Gaussian Software to subscribe to 10 million equity shares of the Essel Group’s cruise line business Jalesh. This will, in turn, enable the company to hold 25 per cent stake in the Mauritius company.

Jalesh, promoted by Amit Goenka, is planning to acquire cruise ships and operate cruise services to various destinations in India and the Middle East. As part of the arrangement, Delta Corp has acquired the right to be a preferred partner to manage and operate casinos and gaming centres in the cruise liners that will be operated by Jalesh.