Essel Group to sell up to 16.5% stake in Zee
MUMBAI: Media baron Subhash Chandra’s cash-strapped Essel Group i s set t o see i t s stake plunge to around 5% in Zee Entertainment Enterprises Ltd.
The conglomerate said on Wednesday that it plans to sell an additional 16.5% stake in Zee Entertainment Enterprises Ltd (ZEEL) to meet repayment obligations. The deal includes a 2.3% stake which is in the process of being sold.
“The group seeks to sell up to approximately 16.5% stake in ZEEL to financial investors, in order to repay loan obligations to certain lenders of the group for whose benefit such shares are currently encumbered (and who have consented to such share sale by the group),” Essel said in a statement. “Out of the aforesaid, the group seeks to sell about 2.3% stake in ZEEL to OFI Global China Fund, Llc and/or its affiliates,” it said.
“Pursuant to the aforementioned transactions, the posttransaction overall holdings of the group in ZEEL will be about 5%, out of which encumbered hol di ngs o f t he g r o up wil l reduce to approximately 1.1% of ZEEL,” according to the statement.
The Essel Group said the development reaffirms the “positive progress on its overall asset divestment approach, undertaken to generate adequate liquidity for the repayment process.” “The group is also working actively on further di vest ments i ncl uding its media/ non-media assets and remains confident to complete the same,” it added.
In July, the Essel Group had said it would sell a 11% stake in ZEEL t o US- based I nvesco Oppenheimer Developing Markets Fund, an existing public shareholder in ZEEL, for ₹4,224 crore. Of this, 8.7% has already been sold to OFI Global China
Fund, and a private investment vehicle I nvesco, while t he remaining 2.3% will also be divested soon. The balance 14.2% stake will be offloaded through off and on market sales, a spokesperson for ZEEL told Mint on Wednesday. The company expects to close the transaction within a week.
According to BSE data, at the end of September, the promoter group held a 22.37% in ZEEL. Of this, 96% was pledged. After the closure of the above transactions, Oppenheimer Developing Markets Fund and OFI Global China will together hold 18.74% in the company.
Ahead of the news, shares of ZEEL surged amid a doubling of volumes, closing 7.49% higher at ₹307.15 on the BSE, widely outperforming a 0.45% gain in the benchmark Sensex index.