Essel Group’s decision to sell stake of its company ZEE Entertainment Enterprises Ltd. (ZEEL) was due to the pressure from lenders to settle their debt of ₹11,000 crore by September, 2019.
US based company Invesco Oppenheimer, which already owned 8 per cent stake in the existing company agreed to make an additional investment in ZEEL and buy up to 11% stake in ZEEL from its promoters, for a total consideration value of Rs. 4,224 Crore.
Mr. Punit Goenka, Managing Director and CEO, ZEEL said that Invesco Oppenheimer as a Financial Investor has further reposed its faith in ZEEL. It is the valuable belief & support of their esteemed financial investors that enable to consistently generate great value, year after year.
Mr. Goenka said, my first preference was a strategic partner, but I had to keep financial investors as backup ready and that’s what I was doing. It’s unfortunate the strategic partner didn’t understand the gravity of the situation. And the time lines they wanted to close the deal was not in line with what we needed. So we took a hard decision that we’ll go with a financial investor.
The Invesco Oppenheimer Developing Markets Fund, which is an investment company registered with the US Securities & Exchange Commission, has a long history of investing in India as a financial investor.
The announcement of 11% stake sale of ZEEL to the Fund is a strong step in the overall divestment process, giving the Promoters the required financial fillip to initiate the repayment process. The Fund has been a financial investor in Zee Entertainment Enterprises Ltd. since 2002.