Storm over Bollywood firm Eros’s new bond deal
Row erupts as beleaguered Bollywood film group Eros submits controversial deal to out-of-pocket investors, weeks before it is due to repay £50m bond
A row has erupted after beleaguered Bollywood film group Eros submitted a controversial deal to out-of-pocket investors, weeks before it was due to repay a £50million bond issued on the London Stock Exchange.
The proposals have provoked anger from investors and US Bank, one of America’s largest banks, has resigned as trustee of the bond.
Row: Eros has faced criticism after failing to pay bondholders’ interest
Eros is run by the Lulla family, one of India’s best-known business dynasties. But the firm has faced criticism here after failing to pay bondholders’ interest when it was due and keeping them in the dark about its financial position.
Now the Lullas are offering investors a deal – 60p per £1 on half their bonds, with the remaining bonds rolled into a new transaction that will not be repaid until 2026, rather than next month. The new bond will pay hefty interest of 9 per cent and investors will receive 0.5p per £1 as a sweetener fee if they accept the deal.
But there are conditions. Eros has failed to file its accounts since 2021 and says it still needs more time. The Lullas are also asking bondholders to waive financial covenants and to let the firm choose a new trustee without seeking their approval.
The bonds, trading at 17p before the deal was announced, have soared to 45p. But they were £1 when issued in 2014.
Neither Eros nor US Bank would comment.