The Subhash Chandra-led Essel Group on Wednesday said that it is planning to sell a 16.5 percent stake in Zee Entertainment Enterprises Limited (ZEEL) to financial investors to repay loan obligations to certain lenders of the group.
After this transaction, it will reduce the promoter stake in Zee Entertainment to 5 percent, so media baron Subhash Chandra will lose control of Zee Entertainment Enterprises Ltd.
Subhash Chandra launched zee, considered being the pioneer of television entertainment industry in India, in 1992. Ever since the launch year, the company expanded operations to enter packaging, infrastructure, education, precious metals, finance, and technology sectors.
“The Group seeks to sell up to 16.5% stake in ZEEL to financial investors 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),” the Essel Group said.
Earlier this year, Essel Group sold up to 11 percent in Zee Entertainment to Invesco Oppenheimer Developing Markets Fund for Rs 4,224 crore.
“Out of the aforesaid, the Group seeks to sell a 2.3 percent stake in ZEEL to OFI Global China Fund, LLC and/or its affiliates. Under the aforementioned transactions, the post-transaction overall holdings of the Group in ZEEL will be 5%, out of which encumbered holdings of the Group will reduce to 1.1% of ZEEL,” it added.
Prior to Wednesday’s announcement, Subhash Chandra’s Essel Group companies held 22.37 percent promoted stake in Zee. Of this, 21.48 percent was pledged as collateral against finances availed by Essel Group firms.
Post the completion of the transaction announced on Wednesday by the company, Oppenheimer Developing Markets Fund, and OFI Global China will together hold 18.74 percent.
ZEEL closed higher by 7.89 percent at Rs 307.15 apiece on the BSE on Wednesday