Chandra offloads 2.5 million shares for Rs 270 million

A little over a month after media baron Subhash Chandra's Zee Telefilms Ltd, announced its promoters had placed 5 million shares with a U.S.-based institutional investor, another 2.5 million shares were offloaded yesterday with an FII.

Though Zee officials did not divulge the price, the placement will raise about Rs 270 million, according to merchant banking sources. The Financial Express, quoting market sources, said the deal was done on the National Stock Exchange (NSE) at a price of Rs 106.50 per share, amounting to around Rs 266.2 million. The transaction represents about 0.6 per cent of ZTL's paid-up capital and further lowers the promoters' stake to around 58.3 per cent.

According to a company release, the proceeds from the placement will be paid back to ZTL upon settlement of the transaction. The group promoters had earlier borrowed Rs 2200 million from ZTL for the Essel group. They had announced that the entire amount would be returned by June 30. However, the Essel group has since then managed to pay back Rs 1100 million in two tranches. An initial payment of RS 600 million was paid and last month's transaction raised another RS 500 million. CIBC Oppenheimer was the investor in last month's deal and paid slightly less than Rs 100 a share for its stock holding.

AC Saha, president, corporate finance and strategy, Essel Group of companies, said: "Placement of these shares reinforces the promoters' commitment to fulfil their obligations, despite the share price of Zee Telefilms LTD not being very attractive at this stage.

The figure of RS 2200 million is what the Zee Network had reportedly advanced to Essel group investment companies, which was subsequently transferred to cornered bull Ketan Parekh's investment companies.

The announcement comes amidst a spurt in activity around the scrip over the last few days. The speculative activity is apparently linked to reports that Chandra may be willing to lower his personal stake to half the present equity which would effectively deprive him of management control of the company.

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