BackZee plans to raise funds via share sale, calls board meeting on 6 June
Zee Entertainment, which has gone into a capital-conservation mode after its proposed $10-billion merger with Sony came apart in January, said the company will consider raising funds by issuing equity or other convertible papers via a private placement, a QIP or a preferential issue.
PremiumMumbai: Zee Entertainment Enterprises Ltd is planning to raise capital to fund its growth, and has called a board meeting on 6 June to consider the proposal, the Punit Goenka-led media and entertainment company said in an exchange filing on Monday.
Zee Entertainment, which has gone into a capital-conservation mode after its proposed $10-billion merger with Sony came apart in January, said the company will consider raising funds by issuing equity or other convertible papers via a private placement, a qualified institutional placement (QIP) or a preferential issue.
Read | We must take a relook at the way we are functioning, says Zee chairman
On Monday, shares of Zee Entertainment ended 5.11% higher at ₹156.35 apiece on a day the benchmark indices surged to their lifetime highs, boosted by exit poll results that gave the ruling BJP-led alliance a huge majority in the 543-seat Lok Sabha, elections for which concluded on 1 June. The counting of votes, and declaration of results are scheduled for today.
The company’s shares, which had hit a 52-week high of ₹299.50 on 12 December 2023, slumped to their 52-week low of ₹129.40 on 13 May, months after its proposed merger with Sony’s India unit was scrapped.
Also read | Zee demands $90 million in termination fee from Sony for calling off merger
While Zee’s merger deal was cancelled, Mukesh Ambani-led Reliance Industries Ltd. has sealed a pact with The Walt Disney Co. to compete with the likes of Netflix and Amazon Prime.
Zee has gone on a cost-cutting drive since the deal with Sony was called off. It has since slashed almost 15% of its headcount, Mint reported in April. The company’s board and leadership structure, too, has changed, and several top management officials have moved on in recent weeks, Mint reported earlier.
The fundraising plan by Zee comes ahead of an anticipated outcome of an ongoing probe by markets regulator on Zee’s promoters over an alleged ₹200 crore fund diversion from the company to other promoter group entities.
During FY24, Zee’s net profit nearly doubled to ₹30.2 crore, from ₹16.4 crore in FY23, primarily driven by advertising revenues and lower expenses.
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