Zee Promoters Expect To Find An Investor By July
Zee’s promoters are in talks with financial and strategic investors to sell stake in the company and expect binding bids by July.
The promoters of Zee Entertainment Enterprises Ltd., which is looking to pare debt, are in talks with financial and strategic investors to sell stake in the media company and expect binding bids by July.
“We are in an advanced stage of discussion with multiple bodies for strategic stake sale,” Punit Goenka told BloombergQuint in an interview. “We are confident of announcing it in July. The objective is to pay off the entire loan against shares.
The Subhash Chandra-promoted Essel Group owes creditors Rs 17,000 crore in all, a BloombergQuint investigation had found. The group has pledged shares of Zee Entertainment, Dish TV Ltd. and Zee Media Corporation Ltd. against loans it took for various infrastructure ventures.
The promoters will retain minority stake in Zee Entertainment even after they sell stake to the potential investor, according to Goenka. “Even after repaying the loan, the family and the promoters will be left with some stake in the company.”
Goenka also didn’t rule out the possibility that he may continue to head Zee Entertainment as a professional. “That is part of the negotiation and is one of the terms. I am open to whatever helps me in the prime objective of repaying the loan.”
Earnings Watch
Zee Entertainment’s subscribers dropped in the March quarter due to the new tariff order by the Telecom Regulatory Authority of India, according to Goenka.
The order allowed customers to opt for channels of their choice. While the industry’s subscribers fell 4-6 percent, Zee Entertainment’s reach declined 6.5 percent during the three months ended March. “The new tariff order deadline kept pushing and we saw some impact on (subscriber) reach in the Hindi speaking market,” Goenka said after the fourth quarter.
The company, however, maintained its advertisement revenue guidance at higher than the industry. It retained the “low teen” subscriber growth outlook for the current year.
Zee will revisit its subscriber guidance at the end of June quarter. It expects the entire disruption to stabilise by April-June 2020. The company has invested close to Rs 2,000 crore for movies and content for its channels and over-the-top platform, which has a monthly active user base of 61.5 million.