Subhash Chandra, promoter of Zee Entertainment Enterprises Ltd., plans on increasing the promoter stake in the company back to 26% from the current 4% levels. He said this in an interview with Mint. He added that he does not plan on raising any debt by raising funds from outside.
"It will take time (stake increase). We will need a lot of money. But we are clear that we are not going to raise funds from the outside. We don’t want debt. It’s not going to be overnight, but that’s the intent," the Mint interview quoted Chandra as saying.
Zee Entertainment has been in focus after its proposed $10 billion merger with Sony was terminated earlier this month, leading to a sharp sell-off in the stock. Shares fell over 30% in a single day, its biggest drop on record.
CNBC-TV18 also accessed a letter that Chandra had written to Finance Minister Nirmala Sitharaman, seeking her intervention in the deal. The letter was written on January 16, six days before Sony pulled the plug on the deal. The letter highlighted how he repaid nearly 92% of the outstanding debt, by selling a stake, which took the promoter's shareholding down to 4% from 40% earlier.
In response, Zee has now approached the National Company Law Tribunal (NCLT), seeking further directions on implementing the merger. The company has also termed Sony's $90 million termination fee demand as legally untenable.
One of the points of contention for the merger to go through was the fact that Sony did not want Punit Goenka to lead the merged entity. Chandra said that Punit Goenka was ready to step aside, but the merger was still called off.
"The question for the shareholders is if you think Punit can’t run the business, who can? So if shareholders think that Sony would agree to the merger if Punit stepped aside, it is ill-founded," the interview quoted Chandra as saying.
Chandra also urged Zee's shareholders to have patience in the interview, adding that Punit Goenka is the right person to lead the "profitable, zero-debt" company.
Zee Entertainment's shares are out of the F&O ban. The stock is down 40% over the last month and has halved over five years.
(Edited by : Amrita)
First Published: Jan 29, 2024 7:27 AM IST
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