Zee Entertainment Enterprises chief executive officer (CEO) Punit Goenka has said that the company will complete stake sale process before the April deadline, a media report said.
Goenka, in an interview with The Economic Times, said that the controversy at parent Essel Group has in no way affected Zee's stake sale. Responding to the question on whom the company is in talks with for stake sale, he said, "Largely, they are global players, predominantly based out of the US. At the forefront are the US companies and let's leave it at that."
Goenka also told the newspaper that Zee's stake sale and developments at Essel Group are two different things.
The CEO also told Business Standard that he would prefer a foreign partner over a domestic one.
The troubled Essel Group said on Sunday it secured a formal consent from lenders, having a pledge on shares held by the promoters in ZEE Entertainment Enterprises Ltd and Dish TV India Ltd, to not declare default till 30 September, 2019 due to the movement in the stock price.
On 25 January, in an open letter, Subhash Chandra, Chairman of ZEE and Essel Group had admitted that the group was in a financial mess and blamed it on aggressive bets on infra, which has gone out of control since the IL&FS crisis and also the acquisition of Videocon's D2H business.
His admission came after Zee shares tanked in stock markets.
Shares of ZEE group companies came under massive selling on 25 January 2018, plummeting up to 33 percent, and suffered a combined erosion of Rs 13,352 crore in market valuation. Shares of Zee Entertainment Enterprises Ltd plunged 26.43 percent to Rs 319.35, Zee Learn Ltd tumbled 18.49 percent to Rs 27.55 and Zee Media Corporation Ltd slumped 9.05 percent to end at Rs 22.10. Dish TV shares crashed 32.74 percent to close at Rs 22.60 on the BSE.
Subhash Chandra, however, did not disclose the quantum of the debt, limiting himself to say that rolling over the debt has been difficult since the IL&FS crisis and the Group has been able to honour its loan commitments till December.
He had assured the lenders to pay back debt once the strategic stake sale by promoters in ZEE, announced in November last year, is complete. The proposed stake sale would halve the promoter holdings, but the Group stated it was facing troubles from "negative forces" "hammering" the stock price.
In November last year, Essel Group had said it was planning to sell up to 50 percent of the promoters' equity in Zee Entertainment Enterprises to a strategic partner.
The group has appointed Goldman Sachs Securities India as the investment banker and the multinational LionTree as an international strategic advisor for the deal.
"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," Goenka had said.
The proposal to divest up to 50 percent of promoter holding was expected to address the group's capital allocation priorities. The capital would go into completely retire the debt of the promoters and to pursue new interests, Goenka had said.
--With inputs from agencies