Zee Entertainment Enterprises shines on promoter stake sale
Essel Group, the Subhash Chandra led promoter group of Zee Entertainment Enterprises (ZEEL), is about to lose the management control of the company as it plans to sell its 16.5 stake in ZEEL to financial investors. The proceeds from this transaction will be utilised to repay the loan of the promoter.
Earlier, the Invesco Oppenheimer Developing Markets Fund bought nearly 11 per cent stake in ZEEL from the promoter. The promoters’ stake in the company has reduced from 38.2 per cent in the quarter ended March 2019 to 22.37 per cent in the quarter ended September 2019. Post this stake sale ,the promoter stake is likely to come down to 5 per cent.
n recent times, the stock of ZEEL was under pressure, owing to promoters’ share being pledged; however, the business was intact. In Q2FY20, the company's revenue was up by nearly 10 per cent YoY to Rs. 1,851.7 crores but, due to exceptional item, the PAT was down by ~48 per cent YoY to Rs. 197.60. With this stake sale, the overhang on the stock is over and, going forward, it will be the underlying business that should drive stock of ZEEL.
With response to this development, the ZEEL stock shines on the bourses. The stock opened 10 per cent higher from its previous close and at 12.17 PM, it was trading at Rs. 335.35 a piece, up by 9.8 per cent from previous close.