- Wealth PMS (50L+)
Network18’s annual report shows their loan to their promoter company “Network18 Group Senior Professional Welfare Trust” stays at Rs. 500 cr.
Remember, the company had loaned money to its own promoter entity (the trust), which has bought shares of the company. And that, after the trust had first taken loans from other financiers, with the company offering collateral.
(This year, the company gave the trust Rs. 6 cr. or so, and got back Rs. 20 cr. from it)
The Trust owns 1.6 crore shares of Network 18, which at Friday’s price of Rs. 30.8 won’t fetch more than Rs. 50 cr. I don’t know if the company has any other assets, and it’s reasonable to guess the loan might not be repaid.
Strangely, although Network18 considers this a loan, they have not recorded any interest expected from the trust. (But if that interest is unpayable anyhow, an entry would be needlessly adding to revenue and receivables)
This is more like a note to keep the topic alive. Network18 isn’t a stock you can short, or one that I would bother going long either.