Zee Entertainment shares surge over 3.5% as firm plans to raise ₹2,237 crore; check details

The board of the company, at its meeting held on Monday, 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, said ZEEL.

This fresh infusion of funds from 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, it said.

Following this, shares of Zee Entertainment soared on Tuesday. Last seen, the stock was trading at ₹140.23 per share on the National Stock Exchange (NSE), rising 1.68%.

According to the company, the board approved the enhancement of promoter shareholding by the issuance of up to 16,95,03,400 fully convertible warrants to promoter group entities on a preferential basis at ₹132 per warrant.

The price as per the prescribed SEBI guidelines comes to ₹128.58 per warrant; however, the Board insisted on a higher price, and the promoters agreed to pay ₹3.42 per warrant higher than ₹128.58 per warrant.

It further said an upfront payment of ₹33 is required for warrant subscription, which is 25% of the issue price. The promoter entity can convert into shares within a maximum period of 18 months from the date of allotment of warrants upon payment of ₹99 per warrant, which is 75% of the issue price at the time of conversion into equity shares.

The promoters currently own 3.99% of ZEEL.

As per the plan, ZEEL will issue warrants convertible into fully paid-up equity shares of the company having a face value of ₹1 each at a price of ₹132.

The preferential issue is subject to shareholders' approval, ZEEL added.

According to the company, this is in line with its strategic ambitions for the future, which is taking necessary steps to identify and invest in new avenues for growth and capitalise on emerging opportunities.

ZEEL further said its board had sought an evaluation of its strategic growth plans from US investment banker JP Morgan.