Siti Networks has faltered on the agreed payment plan with ZEEL due to COVID-19 and pressure from lenders while Dish TV has been making payments in line with the payment plan agreed with ZEEL, the company stated in its Q2 FY 21 concall earlier this month.
ZEEL has collected the receivables from Siti in the first half of FY 21 but Siti has failed to pay the subscription charges for overdue in accordance with the payment plan agreed due to COVID-19 and pressure for lendings to prioritize their payments.
ZEEL has accordingly taken a provision of Rs 81.2 crore towards subscription dues which is due at 30th September 2020 on account of accelerated payment demands by some of the DSRA backed lenders due to delay in restructuring by Siti and its failure to negotiate extended repayment terms.
Dish TV on the other hand has been making payments in line with the plan submitted by it to ZEEL wherein Dish is paying every month’s billing plus a part of the arrears it has accumulated. ZEEL further excepts Dish TV to accelerate payments with arrears likely to come down before the end of the fiscal year with current outstandings at Rs 4.98 billion compared to Rs 5.84 billion at the end of FY 20.
“I would also like to highlight that Dish TV’s financial position has significantly improved over the last six months and consequently its debt rating has been upgraded several notches to A4 from D in the month of February by CARE,” said ZEEL’s Punit Goenka.
ZEEL’s revenue from Siti is being considered on a cash and carry basis for the moment with Siti having paid for the content between April and September 2020 which is why it will carry forward on a cash and carry basis.
“Siti had given us a payment plan which included two aspects – the first was payment for the current billing that was happening and the second was payment for the old outstanding. While the payment for the current billing happened for the April to September quarter, we did not receive payment for the old outstanding and various reasons were there like Punit highlighted – COVID and the pressure from their lenders as well. So in this quarter as a matter of abundant caution we have taken a provision of 81.2 crores for all the outstanding that we had had from Siti Cable,” added ZEEL’s Rohit Gupta.
The company doesn’t except any new write-offs with work with Siti set to be on a cash and carry basis from now on. ZEEL also took a provision of Rs 37 crores for Dish receivables with net provisions at Rs 460 crores due to the same.
Siti’s DSRA liability was more than Rs 100 crore which was mentioned in the March accounts in the annual report with the amount now becoming Rs 971 million due to as a matter of abundant caution ZEEL has taken provision for the same in this quarter which is part of the balance sheet.
ZEEL will make all endeavors to recover the money with the overall outstanding of the DSRA backed loans now down to Rs 2059 million and out of that DSRA liability ZEEL has Rs 971 million liability.