In a new effort to raise funds, the Essel group led by Subhash Chandra, the promoter of Zee Entertainment Enterprises Ltd., will sell up to 16.5% of the company’s capital to financial investors.

“The Essel group plans to sell 16.5% stake in ZEE Entertainment Enterprises Limited (ZEEL) to financial investors,” the media company said on Wednesday in a filing on the Bombay Stock Exchange.

Essel Group’s flagship media company said its promoters were seeking to sell their stake in ZEEL to financial investors, “in order to repay loan obligations to certain group lenders on whom these shares are currently encumbered (and who have agreed to such a share sale by the group) “.

On 16.5%, the group will sell 2.3% of the capital of ZEEL to OFI Global China Fund, LLC or to its subsidiaries. OFI Global is a subsidiary of Invesco Oppenheimer Developing Markets Fund, which already held 8.7% of the company’s capital. Earlier in August, the US-based fund agreed to acquire 11% stake in Zee Entertainment for a total consideration value of up to Rs 4,224 crore. She has been a financial investor in Zee Entertainment Enterprises Ltd since 2002.

Also Read: Essel Group Responds To Share Selling Rumors, Says No Lender Sells Shares

After the transactions, the promoters’ overall assets will fall to 5%, of which the group’s collateral will be reduced to 1.1% of ZEEL, he said.

“This development reaffirms the positive progress of the Group in its global approach to asset disposal, undertaken to generate adequate liquidity for the reimbursement process,” ZEEL said in the regulatory dossier.

Also Read: Zee Entertainment Q2 Profits Up 7% to Rs 413 Crore

As of September 30, the promoters of ZEE held 22.37% of the capital of ZEE Entertainment, of which 96% is pledged to lenders.

Subhash Chandra and his family owe around Rs 7,000 crore to domestic lenders, including mutual funds, and Russian state-backed lender VTB. The money from the sale of equity will go directly to the lenders. Apart from this, developers also sell solar energy infrastructure and assets to raise funds to pay off debts.

Ahead of the announcement, Zee Entertainment’s stock price ended up 7.49% at Rs 307.15 each on BSE.

Edited by Chitranjan Kumar

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