By Abhijeet Sen
Dr. Subhash Chandra Interview: In a significant update boosting shareholders confidence Zee Entertainment Enterprises Ltd (ZEEL) Founder and Chairman Emeritus Dr Subhash Chandra gave a special interview to Zee Business where he told Zee Business Managing Editor Anil Singhvi that Zee Board has approved a Rs 2237 crore promoter investment plan. During the interview with Anil Singhvi Dr Chandra also revealed that the promoter stake will be taken beyond 18 per cent.
Notably ZEELs promoter group shareholding stood at 3.99 per cent as of March 31.
In the special interview conducted by Zee Business Dr Subhash Chandra discussed the companys future mega plans and also said that the promoter investment is proof of his unwavering commitment to the company and its shareholders.
Reminiscing past experiences Dr Chandra recalled the period when he first failed to fulfil his commitment to the financial markets in 2019. The ZEEL Chairman also mentioned about a period when he sold 44 per cent stake in ZEE to pay off debt of over Rs 40000 crore and in the process the promoters stake in ZEE was reduced to just 4 per cent.
Admitting that the other troubles especially the mistakes in the infrastructure business also affected ZEE Entertainment he said that the infrastructure business was a big mistake which was handed over to the wrong people.
Most importantly the ZEEL Founder also mentioned about the fact that after paying off the debt he is now putting the recovery amount back into the company.
1. What is the whole deal?
The promoter group will invest a total of Rs 22374448800 in the company. After this investment the total stake of the promoters in the company will increase to 18.39 per cent.
2. Why buy at a higher price than the market price?
Dr Chandra revealed that the most positive thing about this deal is that the promoters are buying shares at a price of Rs 132 per warrant which is more than the regulatory price (Rs 128.58).
According to Dr Chandra this is the biggest proof of how much confidence they have in the future of the company.
How will shareholders get double benefit?
In the interview Dr Chandra said that the increased promoter holding will benefit the shareholders in many ways.
1. Restoration of trust
Dr Chandra said that the shareholders were uncomfortable with the promoters holding of only a 4 per cent stake.
Minority shareholders also believe that no one other than the promoters can run a large and complex business like ZEE he said.
Increasing the promoters stake will strengthen investors confidence Dr Chandra emphasised.
2. Zees growth will gain momentum
Dr Chandra said that the fund of Rs 2237 crore will act as a booster dose for the company.
This money will be used mainly for growth in content and technology strengthening the balance sheet and rapidly implementing the strategic growth plan Dr Chandra said adding that it will put the company in a better position to compete with big competitors like Reliance and Disney.
Roadmap for the future: Whats next?
Dr Chandra said that there is still money to be paid in some accounts which is being paid on the due date. Also money for infrastructure is also pending from the state governments which was stuck for 4-5 years said Dr Chandra.
ZEEL share price rises
On Thursday the stock of ZEEL was trading at Rs 144 with a gain of about 2 per cent. In the last 1 month the stock has gained 10 per cent. In the last 6 months the stock has seen a growth of 14 per cent.
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