Eros CEO says loan payment delays being rectified as pressure mounts
09/06/2019 18:27
* Co shares under pressure after rating cut, due to payment
delays
* Eros CEO says taking steps to recity delays
By Shilpa Jamkhandikar and Euan Rocha
MUMBAI, June 9 (Reuters) - Eros International EROS.N has
taken steps to rectify delays in loan payments, Chief Executive
Officer Kishore Lulla said on Sunday, as pressure builds on the
Indian media company, with another short-seller report flagging
potential issues at the company.
"All the steps have been taken to rectify the issues (around
delayed loan payments)," said Lulla, in a phone interview. "And
we have no loans, or debt due in the short-term."
The company has seen its New York-listed shares plunge more
than 55% last week, while those of its Indian subsidiary Eros
International Media EROS.NS have sunk more than 30%, after an
Indian rating agency categorized debt of Eros's Indian unit at
"default" levels due to delays in loan payments. urn:newsml:reuters.com:*:nL2N23E054
CARE Ratings said on Wednesday it cut its rating "on account
of ongoing delays/default in debt servicing due to slowdown in
collection from debtors, leading to cash flow issues."
Eros' shares plunged despite assurances from the firm it was
working to sort out the delayed payments. Even as it sought to
calm investor concerns, Hindenburg Research - a short-seller,
published a note https://hindenburgresearch.com/eros-international-on-the-ground-research-employee-interviews-and-private-company-documents-expose-egregious-accounting-irregularities
on Friday, alleging potential wrongdoing at the company.
Lulla dismissed the allegations in the report and noted that
this isn't the first time that the company is being targeted by
a short-seller.
"I don't understand what shorts are trying to achieve here.
It is just trying to create a smoke-screen. There is nothing in
the report that we should be worried about," he said.
(Reporting by Shilpa Jamkhandikar and Euan Rocha in Mumbai)
((euan.rocha@tr.com; +91 22 6180 7257; Reuters Messaging:
euan.rocha.reuters.com@reuters.net))