Mumbai, Nov 20 (IANS) The Subhash Chandra-led Essel group on Wednesday said that it is planning to sell 16.5 per cent stake in Zee Entertainment Enterprises Limited (ZEEL) to financial investors in order to repay loan obligations to certain lenders of the group.
After this transaction, the promoter stake in Zee Entertainment will be reduced to 5 per cent, which means that media baron Subhash Chandra will lose control of Zee Entertainment Enterprises Ltd.
Zee, considered to be the pioneer of television entertainment industry in India, was launched by Subhash Chandra 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 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),” the Essel Group said.
Earlier this year, Essel Group sold up to 11 per cent in Zee Entertainment to Invesco Oppenheimer Developing Markets Fund for Rs 4,224 crore.
“Out of the aforesaid, the Group seeks to sell 2.3 per cent stake in ZEEL to OFI Global China Fund, LLC and/or its affiliates. Pursuant to 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 per cent promoter stake in Zee. Of this, 21.48 per cent 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 per cent.
ZEEL closed higher by 7.89 per cent at Rs 307.15 apiece on the BSE on Wednesday.