‘Safeguarding shareholder value’: What ZEE says after infusion plan setback; stock in focus

Shares of ZEE Entertainment Enterprises Ltd (ZEE) are in focus on Friday morning as the promoter’s proposal to infuse Rs 2,237.40 crore in the media firm via allotment of fully convertible warrants on preferential basis failed to find the required support from shareholders. The Rs 2,237.40 crore fund infusion would have increased promoter’s stake in the company from 3.99 per cent to 18.39 per cent. 

A total of 52.2 per cent of public institutions voted against the proposal while 20.21 per cent of public non-institutions were against the offer. Total votes in favour came in at 59.51 per cent, which were less than 75 per cent required. 

To recall, InGovern Research had suggested that the excessive dilution from the proposed warrants issue and increase in promoter holding would not be in the best interest of the minority shareholders. The proxy advisory firm had recommended shareholders to vote ‘against’ the resolution.

A company spokesperson said the board and the management respect the decision taken by the shareholders, adding that maximizing and safeguarding shareholder value has always been a core area of focus for the media firm. 

“Under the guidance of the board, the company has taken significant efforts to enhance the performance and profitability levels in key areas such as improving the margin profile and reducing losses in the digital segment,” the spokesperson said.

ZEE, the spokesperson said, continues to progress swiftly towards realizing its ambitions by leveraging its cash reserves, prudent approach and entrepreneurial spirit. 

“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,” ZEE said.

ZEE remains guided by a highly-experienced board to further fortify itself for any “unforeseen events” as well as to deliver growth and invest in technology and innovation the company spokesperson said.