MUMBAI (Reuters) - Eros International 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 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.
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 here 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