Zee Entertainment has recorded robust ad revenue growth in its verticals, thanks to the strong performance of the movie cluster as well as the regional portfolio, says Punit Goenka, the managing director and CEO of Zee Entertainment.
In an exclusive interview with CNBC-TV18, Goenka said the promoters would still have a stake in the company post stake sale. Commenting on the impending sale deal, he said: “I have two term sheets already with me for the potential stake sale and given where we are in those negotiations, I can confidently tell you that despite paying back all the loan against share lenders, the promoters will still be left with a stake in the company.”
Excerpts from the interview. You have posted 16 percent ad revenue growth at a time when many consumer companies have reduced ad spends. Tell us about where the ad revenues came from and how they are likely to do?
In our verticals, we have seen significant growth across the portfolio but if I was to highlight, it came largely on the back of the movie cluster as well as the regional portfolio. Within the regional portfolio, it is driven by Marathi, Bengali, Kannada and Tamil.
How was the performance of Zee5, what sort of guidance can you give us going forward?
Definitely in Zee5 also, we have seen significant growth on both advertising and subscription.
How much weight should we give to your guidance considering the impending stake sale? Will the promoters have any control?
I have two term sheets already with me for the potential stake sale and given where we are in those negotiations, I can confidently tell you that despite paying back all the loan against share lenders, the promoters will still be left with a stake in the company.
Can you give us some idea whether you will have management control post the planned stake sale?
That is a process of negotiation. So I can neither confirm or deny that statement.
Other financial assets have risen five times from Rs 180 crore to Rs 1,000 crore. Can you explain this?
These are towards future purchases of content that we have given out on the back of Zee5 investments as well as the impending movie libraries that we have acquired for the future channels to be launched along with renewal of libraries for the existing channels.
There is a concern the street has which is whether these loans are given to group companies. Have you given any loan to group companies?
No, we have not given any loan to any group company. These are basically films that are being put together in the next two years. These are deposits to three production houses who will have output deals with us over the next two-three years.
Give us a timeline on the stake sale, how far are you from that announcement?
I am reiterating that by the end of June or early July we will be concluding the deal with one of the parties and coming out with an official announcement.
Can you at least update us if there has been any change in the potential buyers of the company? You had indicated that you had two term sheets the last time.
No, they will be the same. We have not seen any addition to that so far. We were expecting something after the elections, but nothing to report so far on that.
Are you extremely confident that this will go through without further delay because the street has been waiting for it for a while?
I wouldn’t say it to you if I was not confident.