Essel sells 11% stake in Zee to Invesco
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Rebecca Hawkes
| 01 August 2019

Subhash Chandra’s Essel Group has sold an 11% stake in Zee Entertainment Enterprises for US$635 million (INR 42.240 billion), after rejecting Comcast’s bid to take a controlling interest in the broadcaster.

Zee, which operates 66 linear TV channels in 171 countries as well as a rapidly expanding streaming platform ZEE5, is India’s largest private broadcaster, with reported profits of US$228 million.

A consortium led by US cable giant Comcast, with James Murdoch’s Lupa Systems and investment firms Atairos and the Blackstone Group, had this week made an offer to take a controlling 51% stake in Zee.

The move, selling a smaller stake to US investment group Invesco’s Oppenheimer Developing Markets Fund, enables Chandra to retain control of Zee while improving Essel’s liquidity.

The Essel Group, which owns a 42% stake in Zee, has $2.4 billion in debts and has a market value of $2.7 billion. The group had initiated the process of divesting its key assets, with an aim to repay all the lenders by September 2019.

The fund has invested in Zee Entertainment Enterprises Ltd (ZEEL) since 2002.

“I’m extremely glad to share that the fund as a financial investor has further reposed its faith in ZEEL. It also gives me immense pleasure to note their strong belief and trust in the intrinsic value of our precious asset. It is the valuable belief and support of our esteemed financial investors that enables us to consistently generate great value, year after year,” said Punit Goenka, MD and CEO, Zee Entertainment Enterprises (pictured).

Essel had appointed Goldman Sachs in November 2018 to conduct a strategic review with the possibility of selling half its Zee stake to a global entertainment company.