Aplab to remove debt-ridden Zee Entertainment from promoter list to public

Electric equipment maker Aplab on Wednesday said it will reclassify debt-ridden Zee Entertainment Enterprises Ltd (ZEEL) from promoter category to public category.

The company's board is scheduled to meet on March 26 to approve the reclassification process, Aplab said in a regulatory filing.

For the quarter ended December 31, 2019, stake of ZEEL in Aplab had fallen to 9.50 per cent to 475,000 shares.

"We hereby inform you that a meeting of the Board of Directors of the Company will be held on Thursday, March 26, 2020 to approve the reclassification process of ZEEL from Promoter Category to Public Category and other matters," it said.

Presently, 'Promoter & Promoter Group' hold 58.97 per cent stake in Aplab.

Earlier, ZEEL held 13.21 lakh shares, comprising 26.42 per cent of the paid up capital of Aplab.

ZEEL had acquired these share in 2013.

Subhash Chandra resigns as chairman of Zee Entertainment Enterprises

Zee Entertainment Enterprises Ltd (ZEEL) on Monday said its promoter Subhash Chandra has resigned as chairman of the company's board, with immediate effect.

The company's board has accepted the resignation, ZEEL said in a regulatory filing.

"The board accepted his resignation and noted that this is in line with the requirements of Regulation 17(IB) of Sebi Listing Regulations, which inter alia mandates that the chairperson of the board shall not be related to the managing director or the chief executive officer of the company," the company said.

Chandra will remain the company's non-executive director, it added.

Zee Entertainment extends gain after promoter's stake sale

Shares of Zee Entertainment Enterprises (ZEEL) were up 5 per cent to Rs 363 on Friday, extending its previous day’s 12 per cent rally on the National Stock Exchange (NSE), after the promoters offloaded around 16 per cent stake in the company via open market on Thursday.

In the past three trading days, the stock of ZEEL has rallied 27 per cent, as compared to a 0.25 per cent decline in the Nifty 50 index. A combined 50 million shares changed hands on the counter on the NSE and BSE till 01:20 pm.

On Wednesday, Essel Group said it was planning to sell around 16.5 per cent 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).

Promoter ESSEL Media Ventures sold 69.4 million shares while Cyquator Media Services sold 61.6 million shares and ESSEL Corporate LLP sold 11.8 million shares via bulk deals at an average price of Rs 304 per share, the NSE data shows.

Government of Singapore bought 28.5 million shares, representing 3 per cent stake, while Societe Generale bought 16.7 million shares or 1.73 per cent stake in ZEEL, data shows.

Post transaction, most of the brokerages have upgraded the stock as they believe the deal removes the pledge overhang while also ensuring the continuation of the current management team.

“We see this as two-fold positive for the company. This should enable to resolve a large portion of group’s debt concerns. Trailing 12-month uncertainty of overhang of stock-supply and uncertainty diminishes. The continuity of existing and efficient management viz. Puneet Goenka as MD & CEO, though with reduced stake of around 5 per cent with 1.1 per cent encumbered,” analysts at Dolat Capital said in a company update.

“The transaction removes the overhang on the company that had impacted the stock, which is down around 22 per cent since the time promoters stated their intention to sell a part of their stake despite the run up after the announcement of the stake sale. Operating performance and balance sheet improvement are key for re-rating in the near term,” analysts at Emkay Global Financial Services said in a company update.

Zee Entertainment reports 62.6% hike in Q1 net profit at Rs 530 cr

Media firm Zee Entertainment Enterprises Ltd (ZEEL) on Tuesday reported a 62.56 per cent increase in consolidated net profit at Rs 529.76 crore for the first quarter that ended in June 2019, helped by growth in subscription revenue.

The company had posted a net profit of Rs 325.88 crore in April-June quarter a year ago, ZEEL said in a BSE filing.

Total income during the quarter under review stood at Rs 2,112.03 crore, up 15.93 per cent from Rs 1,821.78 crore in the corresponding quarter of the previous year.

ZEEL's total expenses rose 6.15 per cent to Rs 1,369.99 crore from Rs 1,290.60 crore a year ago.

"We delivered another quarter of strong performance despite the operational challenges faced by the industry due to the implementation of TRAI tariff order. We have witnessed a strong uptake of our channels across markets which is reflected in the 47 per cent growth of our domestic subscription revenues," ZEEL Managing Director and CEO Punit Goenka said.

Subscription revenue was up 36.65 per cent to Rs 708.77 crore as against Rs 518.64 crore in the corresponding quarter last year.

Revenue from advertisement rose 3.55 per cent to Rs 1,186.71 crore as compared with Rs 1,146.01 crore in the year-ago period.

"Domestic advertising growth of 4.2 per cent YoY is considerably lower than the growth in past quarters. This is primarily on account of the decision to convert our two leading FTA (free to air) channels to pay, which significantly impacted the ad growth for the quarter," Goenka said.

ZEEL's International business revenue stood at Rs 160 crore during the quarter.

"The advertising and subscription revenues (international) declined by 7.6 per cent YoY and 9.2 per cent YoY," the company said.

Shares of Zee Entertainment Tuesday closed down 0.66 per cent at Rs 360.95 on the BSE.

Chandras may sell small stake in Zee Entertainment to financial investors

The Subhash Chandra-led Essel Group, expecting to raise more than the initial target from sale of its infrastructure assets, is looking at the option of selling a small stake in Zee Entertainment Enterprises Ltd (ZEEL) for raising funds to repay loans. The group may enter an agreement with a strategic investor at a later stage, sources close to the development said.

The promoters expect to get Rs 9,000-10,000 crore from the sale of their infrastructure assets. The earlier target was Rs 7,000 crore. Among the various options, the group could possibly ask the lenders for an extension of the September deadline and pay part of the Rs 13,000-crore dues. With an extension, it expects to be in a better position to make a deal to sell part of its shares in ZEEL.

If lenders refuse, the Chandras could consider striking a deal with financial investors, including private equity funds to sell around 10 per cent of stake in ZEEL. This, the group believes, will be enough at the current market cap to pay the remaining loan.

With a better realisation from asset sale, sources said the group may not require to sell 20 per cent of its shares in ZEEL by end of July. Calculations suggest that the group would need to raise Rs 3,000-4,000 crore from the sale of promoter shares, instead of the earlier plan of Rs 6,000 crore, giving it more time to strike a deal with a strategic investor.

“Earlier they needed a strategic investor and were willing to give up even up to 25 per cent as they had to raise money by September or go into default,’’ an executive close to the developments pointed out. Now, they can negotiate from a position of strength with a strategic investor, he said. ‘’The investor will be important not for its cash but for the technology and the global footprint it will bring into the alliance,” the executive said. A Zee group spokesperson said, “The process of Zee Entertainment’s stake sale is in an advance stage. The group has received two non-binding term sheets and the overall process is well within the purview of the September 30 deadline. Any additional details cannot be shared due to confidentiality agreements”.

The promoters had taken a loan of Rs 13,000 crore from NBFCs and mutual funds to finance their foray into long-term infrastructure projects. Around 59 per cent of the promoters’ stake in ZEEL was pledged for this. With the stock price of the company crashing on January 25, some lenders had dumped over Rs 500 crore worth of shares in panic. After a meeting with lenders, promoters had agreed to pay back the loan by September through a combination of infrastructure asset sale and sale of half of the promoters’ (41.6 per cent ) stake in ZEEL. It is believed that Sony, which is also in talks with Comcast, had earlier decided to take a back seat in pursuing a deal with the Zee group. But it is now back on the table.

The promoters had recently struck a deal for three of their 12 road projects with CDPQ — a Canadian fund management firm — which will help them raise funds of Rs 3,500 crore.

Roughly, it expects to generate over Rs 2,000 crore from sale of transmission assets and another Rs 3,000 crore from hawking its solar assets.