In an effort to raise funds, Essel Group has decided to sell the promoter's 16.5 per cent stake in Zee Entertainment Enterprises Ltd (ZEEL). This stake will be sold to some financial investors. After this, the promoter's stake in this company will remain around 6 percent.
After the news came, on Thursday, ZEEL saw a tremendous jump in the stock. Around 10 am its shares were trading around Rs 327 with a gain of about 7 per cent.
The company has informed the Bombay Stock Exchange about this sale. Essel Group is a major media company. The company has told BSE, 'The group is selling part of its promoters to several loan lenders to repay the loan liability. The group will sell 16.5 per cent stake in ZEEL, of which 2.3 per cent will be sold to OFI Global China Fund or its affiliates.
OFI Global already has an 8.7 per cent stake in the company. The US fund said in August that it would buy 11 per cent stake in the group for Rs 4,224 crore.
Significantly, as of September 30, 2019, the promoters' stake in ZEEL was 22.37 per cent, of which 96 per cent was pledged to lenders. The promoter family has to pay a debt of Rs 7,000 crore. This loan is from several domestic banks, mutual funds and Russia's bank VTB. The amount received from the sale of this stake will go directly to the account of the lenders. Apart from this, the family is also selling some of its infrastructure and solar power assets to repay the debt.
The group has sold a 205 MW solar power plant for Rs 1,300 crore to Adani Green Energy. Apart from this, the Essel Group is also preparing to sell its stake in India's largest listed education company, Zee Learn. It runs a pre-school chain called Kidzee.
Zee Entertainment Enterprises Limited (ZEEL) is the flagship company of this group. It is a leading TV media and entertainment company in India. Apart from this, 10 channels are operated by the group's Zee Media Corporation Limited. Apart from this, Dish TV, Siti Cable Network, Essel Propac, online gaming company Playwin, Essel Infra Projects Limited, Zee Learn etc. are operated.