Zee Entertainment Enterprises Ltd is floating foreign currency convertible bonds (FCCBs) worth $239 million on a private placement basis.
The proposal was approved by the Zee board on Tuesday.
Zee in a regulatory filing said the bond will carry 5 per cent interest and mature in 10 years.
The company added it will issue the debt instrument to Resonance Opportunities Fund, St. John’s Wood Fund Limited and Ebisu Global Opportunities Fund on such terms and conditions as may be mutually decided between it and the proposed investors.
In the event of conversion of all FCCBs, Zee will issue 12.46 crore equity shares for ₹160.20 a piece. The Zee share had closed at ₹155.45 on the BSE on Tuesday. The markets were closed on Wednesday.
The company did not disclose the purpose of issuing the FCCBs.
Market circles believe that it can be used for business expansion.
On Monday, the shareholders of Zee had approved its proposal to raise ₹2,000 crore from the market through various routes, including issuing equity shares and qualified institutional placements (QIPs).
The special resolution for “issuance of securities for an amount not exceeding ₹2,000 crore” saw 78.83 per cent of the total polled votes, favouring the resolution.
Zee had told its shareholders it plans to raise in one or more tranches through a private placement, a qualified institutional placement a preferential issue or a combination of them. It is now going ahead with FCCBs.
This is Zee’s first fund raising after Sony Corporation terminated a $10 billion merger deal. After the setback, Zee announced a strategic realignment of its revenue vertical, which is being directly driven by Punit Goenka, the MD and CEO.
“This move will improve investor confidence, depending on the nature and quality of investors,” said Karan Taurani of Elara Capital.
The Mumbai bench of the National Company Law Tribunal (NCLT) admitted a plea by Axis Finance to initiate insolvency proceedings against Primat Infrapower & Multiventures Pvt. Ltd (Primat), an Essel Group firm.
Axis Finance, had filed a Section 7 application under the Insolvency and Bankruptcy Code (IBC), 2016, against the company for allegedly defaulting on dues of around ₹100 crore.
"We hold that the debt and default have been satisfactorily established from the records,’’ the NCLT bench said.
