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Zee shares surge 15% after promoter Essel Group sells stake

Updated : November 21, 2019 09:40 AM IST

Zee Entertainment shares jumped 15 percent on Thursday after promoter Essel Group has decided to sell 16.5 percent stake in the company to meet debt obligations.

According to stock exchange data, around 15 crore shares changed hands in block deals at a price of Rs 304 per share, a discount of 1.02 percent on the previous close price of Rs 307.15 per share.

Zee Entertainment shares jumped 15 percent on Thursday after promoter Essel Group sold a 15.72 percent shares via block trades to meet debt obligations. Zee shares advanced as much as 14.99 percent to Rs 353.20 per share intraday on the BSE.

According to stock exchange data, Zee Entertainment’s promoters Essel Group sold 15 crore, or a 15.72 percent stake, via block trades to financial investors at Rs 304 per share, compared to the floor price of Rs 277 per share, raising Rs 4560 crore.

At 9:25 AM, Zee's stock price was trading 8.17 percent higher at Rs 332.25 per share, while the benchmark Sensex was down 0.08 percent.

Proceeds will be used to repay lenders who lent to the promoters against pledged shares. Lenders who stand to recover their loan are: VTB Capital – Rs 2000 crore; Birla MF- Rs 750 crore; HDFC PMS- Rs 550 crore; L&T Finance – Rs 250 crore.

Essel Group seeks to sell a total of 16.5 percent stake to financial investors, including a 2.3 percent stake to existing investor Invesco Oppenheimer which was pending from the last transaction of 11 percent stake sale. This makes Invesco Oppenheimer the single largest shareholder in ZEEL with 18 percent stake.

This confirms CNBC-TV18’s news break on November 11, 2019, in which it was clearly stated that shares of Zee will be sold to wider financial investors to provide resolution to the loan against share issue.

Zee CEO and MD Puneet Goenka in a letter to employees said the sale is "in line with our overall asset divestment approach and most above, adhering to our repayment commitments to all our esteemed lenders".

Zee shares surge 15% after promoter Essel Group sells stake

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