Essel Group plans to divest up to 50% stake in Zee Entertainment; move to enhance 'global reach' , says CEO Punit Goenka

Mumbai: The Subhash Chandra-run Essel Group Tuesday said it is planning to sell up to 50 percent of the promoters’ equity in the group flagship media arm Zee Entertainment Enterprises to a strategic partner. [caption id=“attachment_5546541” align=“alignleft” width=“380”]  File photo of Punit Goenka, CEO and MD, Zee Entertainment Enterprises. Reuters[/caption] The group has appointed Goldman Sachs Securities India as the investment banker and the multinational LionTree as an international strategic advisor for the deal, which it expects to be concluded by March or April 2019. As of the September quarter, promoter and promoter group firms held 41.62 percent stake in ZEEL. “Even though our business is on a strong footing, given our global ambitions and the rapidly converging world of content and technology, we have decided to get a strategic partner with a strong technological expertise and global reach which will help us achieve our ambitions faster,” ZEEL managing director and chief executive Punit Goenka told PTI over phone this evening. “The move will also transform us from a content only entity to a content-technology company which can thrive in the new digital world. We also believe this is in the best long-term interest of our minority shareholders,” he said. The strategic partner will augment the company’s capabilities in content, technology and distribution, and take the company beyond the Indian diaspora. Goenka said the decision to undertake a strategic review of Essel’s shareholding is aimed at maximising value for the business. The proposal to divest up to 50 percent of promoter holding is expected to address the group’s capital allocation priorities. The capital will go into completely retire debt of the promoters and to pursue new interests, Goenka said. When asked whether its Silicon Valley arm Zee Media Labs, which is into technology innovations, will be converged with the company once the strategic partner comes on board, he said, “that will depend on strategic partner’s interest, though we are open to bringing both into the fold.”