Television

×

×

ZEEL's Punit Goenka on Oppenheimer transaction, strategic investor, additional stake sale

ZEEL will sell 11% of promoter share to Oppenheimer Fund

https://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/tv-images/2019/08/01/punit.jpg?itok=ttV8WOrX

MUMBAI: Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday announced what much of the media and entertainment as well as the investor ecosystem had been waiting to hear for a while. ZEEL reached an agreement with US-based Invesco Oppenheimer Developing Markets Fund for 11 per cent (around Rs 400 per share) of the promoter stake for Rs 4,224 crore. This essentially means the fund will intensify its shareholding to 18.7 per cent in the company.

This is the second round of good news for the Essel Group promoter family after acing Q1 of FY20 with a 40 per cent jump in its profit at Rs 512 crore on a revenue of Rs 1,789 crore, capping off a 14.5 per cent year-on-year growth.

The infusion of Rs 4,224 crore will give some relief to the group as it races to meet the 30 September deadline to pay off loans to the tune of Rs 11,000 crore to mutual funds, NBFCs and banks.  

ZEEL MD & CEO Punit Goenka expects the Invesco Oppenheimer transaction to get completed by 31 August. He added that the deal will be done through an escrow mechanism wherein “the lenders will have to pool their shares and once the escrow agent confirms that the requisite number of shares have been placed, they will tell Oppenheimer to wire the funds and therefore on that day, the transfer of both will happen.”

Goenka is confident that the promoters will be able to raise the remainder Rs 6,800-odd crore it needs to repay lenders by selling off some of its non-media assets in which it has invested like roads, infrastructure and solar energy. He was speaking to investment analysts late in the evening of 31 July.

Invesco Oppenheimer, which until now owned 7.74 percent stake in ZEEL, is a pure equity shareholder and won’t have a seat on the board, he pointed out.

“There’s no such agreement but I am pretty confident once investor like Invesco Oppenheimer is buying 11 per cent stake at certain price that validates our value. Therefore anybody else who may look at ZEE can’t really question it and that price should be very easily selling through,” said Goenka responding to whether ZEEL would sell rest of the stake below Rs 400 per share.

Notably, Goenka did not rule out selling more promoter stake in the company. He also added that the Essel Group has zeroed in on buyers for some of its non-media assets. However, should the sale of these assets disrupt the repayment timelines, then the company will “step it up with the Zee stake sale,” Goenka revealed.

ZEEL opted against a deal with a strategic partner for it would have taken longer to close the transaction thereby delaying the repayment process. 

“Strategic investor is off the table for now,” Goenka remarked.

He, however, briefly touched upon the possibility of ZEEL partnering some of its other media assets with like-minded strategic partners.

Having consistently delivered profits and maintained a good growth trajectory, ZEEL’s prospect of finding a financial investor or strategic partner was doubted by few. This was despite mutual funds having witnessed their investments in the group turn illiquid of late.

The sentiment was echoed by Invesco-Oppenheimer Developing Markets Fund portfolio manager Justin Leverenz who described the transaction as “highly compelling” for investors in the fund due to the “sound fundamentals of Zee.”

The latest development is bound to cheer investors and lenders like mutual funds and insurance companies that had lent considerably to ZEEL’s promoters against collateral.

“After this entire episode, promoters will be left with enough stake in ZEE for them to get motivated and excited to continue running the company with the legacy it has done so far,” Goenka remarked.

With the ZEEL promoters now set to repay the debt to lenders and investors from the proceeds of the stake sale, some of the debt funds that have been under the pump will now also be able to fulfill commitments to their investors.

It has taken ZEEL extended deadlines to get to this point. In a sense, the entire process from taking the tough call to sell promoter stake to striking the right deal amidst back-to-the-wall negotiations has been synonymous with what founder and chairman Subhash Chandra has embodied all his life – living to fight another day.

Latest Reads

https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/ss.jpg?itok=o6tHW5k2
Star Sports launches MISSION 2020 with the Men in Blue

MUMBAI: The ‘Men in Blue’ have embarked on their quest to bring the ICC T20 World Cup Trophy home next year, beginning with the home season of cricket on Star Sports with South Africa tour of India that started on September 15th. Mission 2020 will showcase all India matches as they prepare for the...

Television TV Channels Sports
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/zee.jpg?itok=KNZ8xLWb
Zee Kannada’s Jote Joteyali launch breaks all records in the Kannada Television Industry

MUMBAI: The No. 1 Kannada General Entertainment Channel, Zee Kannada’s recently launched Jote Joteyali tops the charts in the Kannada television industry in the fiction genre. This eccentric love story garnered a total of 171% of growth in the prime slot of 8:30 PM, Monday to Friday. The record...

Television TV Channels Regional
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/cnn.jpg?itok=O8cbHiBg
CNN International to launch new programming

MUMBAI: CNN International, which reaches more than 400 million households around the world, is launching new programming from September 24, 2019. Broadcasting live at 2.30am IST, The Brief with Bianca Nobilo will provide viewers with an incisive look at the most significant live events and stories...

Television TV Channels News Broadcasting
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/fyi.jpg?itok=uGaTFks2
FYI TV18 presents a modern dating show with a twist

MUMBAI: FYI TV18 is all set to burn up the dance-floor in its latest premiere, ‘Flirty Dancing’. Britain’s best-loved choreographer Ashley Banjo, who won ‘Britain’s Got Talent’ with his über-cool street-dancing moves, has now moved on to play cupid between strangers looking for love. With...

Television TV Channels News Broadcasting
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/nitin.jpg?itok=zg6LOcZF
Nitin Bawankule to join as Star India head of ad sales from 1 October

MUMBAI: Star India, today announced the appointment of Nitin Bawankule as the head of ad sales. In this role, Bawankule will be responsible for leading ad sales across both linear broadcast and OTT for Star TV network and Hotstar respectively. This appointment is effective 1 October 2019 and will...

Television TV Channels People
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/kidz.jpg?itok=M_O_RsT1
Discovery Kids to launch animated series ‘Fukrey Boyzzz’ on 12 October

MUMBAI: Discovery Kids is all set to up the ante with the introduction of fun filled animated series ‘Fukrey Boyzzz’ based on superhit Bollywood franchise ‘Fukrey’ and ‘Fukrey Returns’. The channel will start broadcasting the series ‘Fukrey Boyzzz’ on October 12th, 2019 onwards at 1.30 PM and 7.30...

Television TV Channels Kids
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/prive.jpg?itok=X-VDYHWK
&PrivéHD celebrates two years of nuanced cinema with a special line-up of never-seen-before movies on Indian television

MUMBAI: To new emotions, new revelations, new stories and to the new beginnings! It’s celebrations galore as &PrivéHD, the premium destination for nuanced cinema, enters its third year of showcasing stories that go beyond the obvious. To commemorate this momentous occasion and the start of a...

Television TV Channels English Entertainment
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/jiggy.jpg?itok=K91AjITB
Dream Theatre wins Licensing Mandate for 'Little Singham'

India’s homegrown hero will now be within an arm’s reach as Dream Theatre Pvt.  Ltd., India’s foremost licensing and branding representation company, has won the mandate for licensing and merchandising for Little Singham, a show inspired by the popular Hindi film Singham. 

Television TV Channels Viewership
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/09/20/kairali.jpg?itok=9DbRJlOu
BARC week 37: Kairali TV replaces Zee Keralam in Malayalam space

MUMBAI: In week 37 of BARC India ratings, Kairali TV has replaced Zee Keralam which was the new entrant last week in Malayalam segment. The channel garnered 68564 weekly impressions (000s). Gujarati segment also witnessed some changes. Colors Gujarati Cinema grabbed the leading position from Colors...

Television TV Channels Viewership

Sign up for our Newsletter

subscribe for latest stories