Mumbai: Bonds of a Zee group company were traded at a deep discount, with the finances of the Subhash Chandra-controlled empire said to be getting weaker.Bonds of Diligent Media Corporation, a Zee group company, were traded at a discount of about 25% with the transaction size at about 500 crore.
The unlisted bonds were transacted in three tranches on the exchange platform on Monday.
The weighted average price was at 75.57 per unit, people familiar with the matter said, citing secondary market quotations.The deals took place privately because the securities were not listed.
ET could not ascertain the buyers and sellers.
While the largest lot was at 250 crore, the other two were at 150 crore and 100 crore.The papers are more of perceived junk securities as the grade B is just a prelude to D category, said an official from a rating company.
The company has not defaulted, the official said.The bonds will mature in 5-6 months.
Hence, the yields reported for such trades were exceptionally high at 723.75%.Rating company ICRA cut the creditworthiness of DMCLs non-convertible debenture programme to B with a negative outlook earlier in December.
There is a corporate guarantee from Zee Media Corporation for DMCLs bonds.The negative outlook on the long-term rating factors in the reduced financial flexibility of the Essel group and DMCLs poor liquidity position, ICRA said in a note on December 12.Promoter Essel Group faced trouble repaying outstanding loans last year.Several foreign funds picked up stakes in Zee Entertainment Enterprises as the promoters sold stock to repay loans, ET had reported on November 22.DMCL reported a net loss of 30.5 crore on an operational income of 37.4 crore in the first half of FY20 compared with a net loss of 30.9 crore a year earlier.