In an investor call on October 5, Punit Goenka, Managing Director (MD) and Chief Executive Officer (CEO) of Zee Entertainment Enterprises disclosed details about the company’s shareholding.
Out of the 22 percent promoters’ shareholding in Zee Entertainment, around 90 percent is pledged with financial institutions.
It was in July when ZEEL promoters had agreed for an 11 percent stake sale to US investment group Invesco Oppenheimer Developing Markets Fund.
After this sale, the promoter holding came down to under 25 percent.
In September, Essel Group’s lenders sold pledged promoters’ shares of Zee Entertainment and brought down the promoter holding in the company even further.
Before the deal with Invesco, the promoters’ stake in Zee was 35.7 percent at the end of June quarter. About 64 percent of it was pledged.
Talking about the 11 percent stake sale to Invesco, Goenka said that 8.7 percent stake in Zee Entertainment have been sold. The balance of 2.3 percent remains and the talks for which are ongoing with Invesco. However, he said that there has been a delay in completing the balance sale because of restrictions on insider trading window.
On October 4, Russian investment bank VTB Capital disclosed that Zee promoters have pledged 10.71 percent shareholding in the media giant.
The disclosure came on the back of new the Securities and Exchange Board of India (SEBI) norms under which a promoter has to disclose details of share pledges, invocation or release of such pledge or encumbrance within seven days. The SEBI guideline came into effect on October 1.
Goenka clarified during the call that the loan sought from VTB Capital was included in the total loan against shares disclosed to the market.
In late September, Essel Group received a six-month extension to repay dues.
In an earlier interview to Moneycontrol, Utkarsh Sinha, Managing Director, Bexley Advisors, a boutique, early stage investment bank, had said that it is likely that the remaining stake sale (the promoters had sold 11 percent, with other nine percent on the block) will proceed soon, given the breather provided by the lenders.
He had added that with the time extension it would be good to have a global strategic partner rather than a financial investor which will give a strong signal to the market.
According to him, Zee’s fundamentals have not changed and it is the financials that are creating the problem.
Lenders to Zee have recovered nearly 50 percent of their outstanding dues, say reports.
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