Zee Entertainment Enterprises Ltd. on Monday approved plans to raise up to Rs 2,237 crore from promoter entities via the issue of warrants on a preferential basis. The total promoter shareholding will rise to 18.39%.
The board approved the issue of nearly 17 crore fully convertible warrants at Rs 132 apiece to promoter group entities Altilis Technologies Pvt and Sunbright Mauritius Investments Ltd., according to a stock exchange filing.
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The warrant price is above the SEBI-prescribed floor of Rs 128.58, with promoters voluntarily paying a Rs 3.42 premium per unit.
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As per regulatory norms, these promoters have to make an upfront payment of Rs 33 as a subscription for each warrant, which is equivalent to 25% of the warrant issue price.
The warrants constitute up to 15% of the share capital on a fully diluted basis post-conversion. The amount paid against these warrants will be adjusted against the issue price for the resultant equity shares.
The promoter entities can exercise their warrants in one or more tranches within 18 months from the date of allotment.
Zee will convene an extraordinary general meeting on July 10 to seek shareholder approval for the warrant issue.
The promoter holding in the company is nearly 4% as of March, according to BSE shareholding data.
"The infusion of funds from the promoters will enable the company to further fortify its core business segments and strengthen its financial foundation to explore value-accretive growth opportunities in the evolving Media & Entertainment landscape," Zee said in a statement.
Multinational investment bank JPMorgan advised the company on the strategic alternatives ahead of this decision and assessed the company's growth plans and strategic initiatives, the statement said.
Shares of Zee Entertainment settled 0.44% higher at Rs 137.95 apiece on the BSE, ahead of the announcement, compared to a 0.84% gain in the benchmark Sensex. The stock has fallen 14% in the last 12 months but has risen 12% so far this year.
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