Bollywood Filmmaker Said to Win Debt Reprieve After Failed Deal

  • Eros amends and extends terms on its expiring revolver
  • Effort to refinance with debt sale collapsed earlier in March

Filmmaker Eros International Plc has won a lifeline on its credit facility after investors rebuffed an earlier effort to raise new debt, according to people with knowledge of the matter.

The producer of Bollywood films amended and extended the terms of its revolving credit line that was set to expire on Friday, said the people, who asked not to be identified as the information isn’t public. The Mumbai-based company scrapped a bond offering earlier this month that would have allowed it to repay the revolver. Terms of the new facility haven’t been publicly disclosed. Amita Naidu, a spokeswoman for Eros, wasn’t immediately available for comment.

Eros’s $200 million bond offering three weeks ago was pulled after investors demanded a higher interest rate than the company was willing to pay. It was the latest struggle for Eros in international markets, where negative reports from short sellers have battered the shares for the past two years. Eros’s U.S. stock has plunged more than 70 percent since mid-2015, when bearish investors began casting doubts on the company’s financials. Eros has previously denied and disputed the short-seller claims.

Its New York-listed stock jumped as much as 7.2 percent on Friday after Bloomberg reported the company had secured an extension on its revolver. The filmmaker and distributor is also listed in Mumbai. It had $293.6 million of borrowings at the end of 2016, of which $126.1 million is repayable within one year, according to the marketing materials on its original bond offering obtained by Bloomberg.

The company had an $89 million outstanding revolver, according to a March 28 S&P Global Ratings report. Eros has high working-capital requirement that will likely strain its finances, S&P said in an earlier report. Its extended credit to customers puts additional pressure on free cash flow, the report said.

Eros had originally obtained a $150 million five-year credit line in January 2012 in a deal that was led by Lloyds Banking Group Plc.

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