Investors owed £2m in Bollywood bond deal drama
Feud over bond deal offered by one of India’s biggest Bollywood film groups escalates after it fails to pay British investors more than £2m in interest
Song and dance: Eros has admitted complex restructuring of a £50m bond issue has been delayed
A row over a bond deal offered by one of India’s biggest Bollywood film groups has escalated after it failed to pay British investors more than £2m in interest the company owes them.
Eros has also admitted that the complex restructuring of a £50 million bond issue has been delayed.
Bondholders are rioting after the Indian company – run by the ultra-wealthy Lulla family, one of the country’s best-known business dynasties – has repeatedly missed payment terms, citing problems sending money to the UK.
The group also revealed that negotiations are underway with the Bank of India and other organizations over debts it has elsewhere.
Eros launched a £50 million bond on the exchange in 2014.
The Lullas restructured the deal in 2021 and in March this year asked bondholders if they could do the same again, offering to buy back up to half of the bonds at 60 pence in the pound, with annual interest rising from 8. 5 percent to 9 percent. cent and delaying the bond redemption from April of this year to 2026.
Bondholders agreed to the new terms under which they can receive up to £15 million.
But they have yet to discover how many bonds Eros will buy back and when they will receive their money. An initial deadline of April 12 has passed, a second deadline of April 28 has also been missed, and investors now fear that even though the company has promised to pay bondholders by May 15, that deadline will not be met either.
Many have turned to the trustee, M&G, for answers, as the investment firm’s role is to liaise between investors and the Indian company and ensure that communications between the two parties are ‘effective and efficient’.
The company, which took over the trusteeship last month, is said to be in talks with Eros.
The Financial Conduct Authority (FCA) is also under fire.
Some feel that Eros should never have listed its bonds here in the first place.
The FCA would not comment on the Eros bond, but is aware of the issues raised by investors and may investigate the matter if it believes rules have been broken.