The board of Zee Entertainment has approved the issuance of up to 24.95 crore fully convertible warrants to the promoter entity, Sunbright Mauritius Investments at an issue price of Rs 126 apiece, taking the total fund raise to ₹3,143.52 crore.
- In line with the regulations, 25% (Rs 31.5/ share, Rs 786 cr) will be payable upfront and balance 75% (Rs 94.5/ share, Rs 2,358 cr) within 18 months on exercise.
- The warrant price is around 16% premium to the currently prevailing stock price.
- If agreed and executed, this will help promoters significantly increase their current shareholding of 3.99% in the Company. Based on current calculations, it may reach 25-30%.
- Parallely, Board has also approved an ESOP plan comprising 3.74 cr options at a similar price.
The proposal is subject to shareholder’s approval for which a separate EGM will be convened. Last year, Zee had attempted a similar fundraise of Rs 2,200 cr via warrants, proposing to more than quadruple the promoter Goenka family’s 3.99% stake. Prominent foreign shareholders including Morgan Stanley Research’s Calvert Research and Management and the City of New York Group Trust had rejected the proposal. Very likely that the current proposal would be rejected too.