Row erupts as embattled Bollywood film group Eros submits controversial deal to direct investors, weeks before it is due to repay a £50m bond
A row erupted after embattled Bollywood film group Eros submitted a controversial deal to direct investors, weeks before it was due to redeem a £50million bond issued on the London Stock Exchange.
The proposals angered investors and US Bank, one of the largest US banks, resigned as trustee of the bond.
Row: Eros faced criticism after failing to pay bondholder interest
Eros is ruled by the Lulla family, one of India’s best-known trading dynasties. But the company has faced criticism here after failing to pay bondholders’ interest as they fell due and keeping them in the dark about its financial situation.
Now the Lullas are offering investors a deal – 60p for £1 on half of their bonds, with the remaining bonds wrapped up in a new deal that won’t be repaid until 2026, rather than next month. The new bond will pay high interest of 9% and investors will receive 0.5p per £1 as a sweetener fee if they accept the deal.
But there are conditions. Eros hasn’t filed accounts since 2021 and says it still needs more time. The Lullas are also asking bondholders to waive financial covenants and let the company choose a new trustee without seeking their approval.
The bonds, trading at 17p before the deal was announced, soared to 45p. But they were £1 when they were issued in 2014.
Neither Eros nor US Bank would comment.
