US-based Invesco-Oppenheimer Developing Markets Fund has agreed to pick up 11% stake in Zee Entertainment Enterprises Ltd (ZEEL), the flagship media company of Subhash Chandra’s Essel Group. The stake sale will be for a total consideration value of up to ₹4,224 crore, the company said in a press statement.
The proceeds from the stake sale will go towards paying off loans worth ₹13,000 crore that the Essel group has across various group companies, particularly in infrastructure, and will also help avert a looming default of ₹7,000 crore of payments to mutual fund investors in September.
The “Essel Group had initiated the process of divesting its key assets, with an aim to repay all the lenders by September 2019,” the statement said.
Punit Goenka, MD and CEO, ZEE Entertainment Enterprises Ltd, said, “I’m extremely glad to share that the Invesco-Oppenheimer Fund as a Financial Investor has further reposed its faith in ZEEL. It also gives me immense pleasure to note their strong belief and trust in the intrinsic value of our precious asset. It is the valuable belief and support of our esteemed financial investors that enables us to consistently generate great value, year after year.”
The fund has been a financial investor in Zee Entertainment Enterprises Ltd since 2002. The promoters led by Subhas Chandra own 35.79% of ZEEL, of which 64% is pledged with financial institutions.
In June, Mint reported that the debt-ridden Essel group was looking to sell a minority stake in broadcaster ZEEL to a financial investor by the end of July to meet immediate payment obligations. This was in addition to its ongoing efforts to find a strategic buyer, as well as sell some of the group’s infrastructure assets. Subhash Chandra has placed up to 51% of the ownership of ZEEL on the block to stave off creditors and shore up the group’s finances.
This article was first published on livemint.com