Zee Entertainment Enterprises share price rose in early trade today on after the media firm said that its promoter was considering selling their stake in the company. Zee Entertainment Enterprises share price rose up to 15% to Rs 353.20 compared to the previous close of Rs 307.15 on BSE. The large cap stock has gained 16.89% in the last two days.
The stock opened with a gain of 10% today at Rs 307.15 on BSE. In a fresh effort to raise funds, Subhash Chandra-led Essel Group, the promoter of Zee Entertainment Enterprises, will sell up to 16.5 per cent stake to financial investors.
"The Essel Group is planning to sell 16.5 per cent stake in ZEE Entertainment Enterprises Limited (ZEEL) to financial investors," the media company said in a filing to the Bombay Stock Exchange on Wednesday.
The flagship media company of Essel Group said that its promoters seek to sell stake in ZEEL to financial investors, "in order to repay loan obligations to certain lenders of the group for whose benefit such shares are currently encumbered (and who have consented to such share sale by the group)".
Of the 16.5 percent divestment target, 2.3 percent will be sold to OFI Global China Fund-a subsidiary of Invesco Oppenheimer Developing Markets Fund-which already holds 8.7 percent in the media company.
Invesco Oppenheimer Fund which is among one of the oldest investors of Zee in August agreed to buy out an additional 11 percent stake in Zee from its promoters for Rs 4,224 crore. The fund already holds 7.74 percent in Zee as of June 2019.
As of September 30, ZEE promoters hold 22.37 per cent stake in ZEE Entertainment, out of which 96 per cent is pledged with the lenders. After the transaction, Essel's holding will fall to five percent in the company, out of which encumbered holding will be 1.1 percent. The stake sale will be to clear loan obligations to certain lenders of the group.
By Aseem Thapliyal