Zee Entertainment shares slip over 6% as shareholders reject proposal to raise ₹2,237 crore; check details

This would have increased the promoter’s shareholding to 18.4% in the company.

The special resolution to issue fully convertible warrants to the promoter group on a preferential basis received only 59.514% of the votes in favour, while 40.48% were against the proposal, according to the filing by Zee Entertainment Enterprises Ltd. (ZEEL) on Thursday evening. Being a special resolution, it needed 75% shareholder approval.

The company's scrutiniser, in its report, said, “As the number of votes cast in favour of the resolution was not more than three times the number of votes cast against, the special resolution has not been passed with the requisite majority.”

At the time of writing the article, shares of Zee Entertainment were trading at ₹137.64 apiece on the National Stock Exchange, falling 3%.

Last month, ZEEL said it planned to raise ₹2,237.44 crore from promoter group entities, which will lead to an increase in promoter shareholding to 18.4%.

The board of the company approved the “issue of up to 16.95 crore fully convertible warrants, for consideration to be received in cash” to Altilis Technologies and Sunbright Mauritius Investments, Promoter Group entities, on a preferential basis.

In a statement, a company spokesperson said its board and the management have noted that around 60% of the shareholders who participated in the voting process have expressed their support towards the resolution pertaining to the issuance of fully convertible warrants to promoter group entities and are grateful for their support.

“The Board and the management also respect the decision taken by the remaining shareholders,” the spokesperson added.

Asserting that the company "continues to progress swiftly towards realising its ambitions by leveraging its cash reserves, prudent approach, and entrepreneurial spirit," the spokesperson said.

"While the efforts being taken have augured well for the company, in order to further safeguard it from a future growth perspective, it is important to keep a sufficient war chest available in order to consistently build a strong foundation to address the rapid market shifts and outperform the fierce competition," he added.

Norges Bank Investment Management, which oversees the Government Pension Fund Global, among the single largest shareholders in the company, had indicated it would vote in favour of ZEEL's proposal.

Meanwhile, proxy advisory firm Glass Lewis had also advised ZEEL's shareholders to vote in favour of the special resolution.