Zee Entertainment Enterprises ltd (ZEEL) shares touched an intra-day high price of Rs 301.5 per share on BSE on Wednesday, rising as much as 5.35 percent. Investor sentiment remained bullish on the stock after the company's board in a meeting on Tuesday announced the reappointment of Puneet Goenka as Managing Director and CEO for another period of five years.
"This is to inform you that the Board of Directors of the Company at the meeting held today i.e. on November 5, 2019, has approved in-principle, the re-appointment of Mr. Punit Goenka as Managing Director & CEO of the Company, for a further period of 5 years upon conclusion of his current term on December 31,2019 i.e. w.e.f. January 1, 2020," the Essel Group firm informed in an exchange filing.
It added that the re-appointment, effective from January 1, 2020, will be subject to approval of shareholders, which will be sought by way of postal ballot.
Meanwhile, media baron Subhash Chandra will own less than 1 percent of his group flagship Zee Entertainment after the share sale by lenders.
Chandra's current holding is 22.39 percent while the pledged shares are 21.48 percent. Out of the tranche of pledges shares, the lenders have put in the escrow account 10.71 percent of the shares. The rest is with VTB Bank.
The buyers of the shares are likely to be storied media conglomerates, Sony and Rupert Murdoch's News Corp. The value of the current holding is Rs 6,187 crore.
Subhash Chandra's stake after sale by lender's will be 0.89 percent. So, in effect, Subhash Chandra will own less than 1 percent of Zee Entertainment. This would mean that with a miniscule percentage of holding, Chandra may lose influence over the company he founded.
The promoters of the company have been in constant dialogue with various prospective investors and lenders without any involvement of the company.
In September, the Essel Group announced the successful completion of the first tranche of Zee Entertainment Enterprises Limited's (ZEEL) stake sale to Invesco Oppenheimer Developing Markets Fund.
As per the official communication issued in July 2019, the Essel Group had entered into an agreement to sell up to 11 percent promoter stake in ZEEL to the Fund.
"This development reaffirms the Group's positive progress on its overall asset divestment approach undertaken, to generate adequate liquidity for the repayment process. The Group is also working actively on further divestments including its non-media assets and remains confident to complete the same", Essel group had said.
In a disclosure filed in October, VTB had informed that pursuant to its rights under the loan facility and under instruction from the lenders, VTB has acquired the right to direct the sale of 10.71 percent in the target company held by Essel Media Ventures.
During the second quarter ended September 30, ZEEL had reported total revenues of Rs 2,122 crore, a growth of 7.4 percent over the corresponding period last year. The profit grew 6.9 percent to Rs 413.2 crore.
At 10.18 am, ZEEL shares quoted at Rs 299.20, up 4.65 percent on BSE. The stock opened at Rs 286, marginally lower from its Tuesday's close of Rs 286.20 per share. It touched an intra-day low of Rs 284.30. The benchmark 30-share S&P BSE Sensex traded 149 points lower, or 0.37 percent, at 40,099.
So far this year, ZEEL shares have corrected by over 36 percent, but the one-month return on the stock is positive by over 27 percent.
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-with inputs from IANS
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