Zee Entertainment Enterprises, the mass media company owned by Essel Group, might spin-off its video on demand platform, Zee5, into a subsidiary, a media report said.
Zee Entertainment is likely to offer up to a 20 percent direct stake to a global strategic investor in Zee5, according to Business Standard. The report said that the investor will also be offered up to 20.8 percent Zee Entertainment.
Zee is reportedly planning to set up a group of channels to attract new customers and take on its competitor in over-the-top media business Reliance Jio, Business Standard said.
Last week, the Subhash Chandra-run Essel Group said it was planning to sell up to 50 percent of the promoters' equity in the group flagship media arm Zee Entertainment Enterprises to a strategic partner.
The group appointed Goldman Sachs Securities India as the investment banker and the multinational LionTree as an international strategic advisor for the deal, which it expects to be concluded by March or April 2019.
As of the September quarter, promoter and promoter group firms held 41.62 percent stake in ZEEL. "Even though our business is on a strong footing, given our global ambitions and the rapidly converging world of content and technology, we have decided to get a strategic partner with a strong technological expertise and global reach which will help us achieve our ambitions faster," ZEEL managing director and chief executive Punit Goenka told PTI on 14 November.
"The move will also transform us from a content only entity to a content-technology company which can thrive in the new digital world. We also believe this is in the best long-term interest of our minority shareholders," he said.
The strategic partner will augment the company's capabilities in content, technology and distribution, and take the company beyond the Indian diaspora.
Last month, Zee Entertainment Reliance Jio signed a deal where ZEE would start sharing its content library and 37 live TV channels with the latter with immediate effect. The deal will allow over 227 million Jio subscribers access to ZEE's content, The Economic Times reported.
With inputs from PTI