Chandrashekar BhatBy: Chandrashekar Bhat
Eros Media World’s bondholders in the UK have become anxious as the India-based media and entertainment company has not come out with any update on its coupon payment.
In 2014, it issued bonds worth total £50 million, offering an annual coupon of 6.5 per cent and thousands of investors in Britain put their money in the London Stock Exchange-listed financial instrument as savings bank deposits yielded very little interest.
However, the price of the bond collapsed to £5.8 as of Monday from the issue price of £100. Investors are worried as the company announced last November that it could not make the coupon payment which was due on 17 October.
The company, involved in the production and distribution of Bollywood films, cited the “ongoing administrative issues flowing from its demerger with STX Entertainment” as the reason for the delay in the payment.
Eros said at the time that the company was “committed” to rectifying the delay “as soon as possible and will do so shortly.”
However, the filing to the LSE made no mention of a specific time frame for the payment of the pending coupon even as the bond will mature on April 15 this year.
Meanwhile, Eros has been delisted from the New York Stock Exchange because of the company’s inability to file its annual reports and this added to investors’ concerns.
The UK Financial Conduct Authority has admitted it is considering an investigation into Eros.
According to a letter seen by The Mail on Sunday, the regulator is reviewing the situation.
“Not all breaches of our rules or requirements constitute serious misconduct. However, where we suspect serious misconduct, we will start an enforcement investigation,” the letter said.
Eros has been approached for comment.
