Zee Entertainment Enterprises to raise $239 million through FCCB

Zee Entertainment Enterprises said it is raising $239 million via foreign currency convertible bonds (FCCB) from Resonance Opportunities Fund, St. John’s Wood Fund, and Ebisu Global Opportunities Fund.

In a late evening statement, the company said its Board of Directors, at its meeting held today, approved raising funds by issuing 5 per cent coupon, unsecured, unlisted foreign currency convertible bonds up to $239 million, maturing in 10 years, on a private placement basis to Resonance Opportunities Fund, St. John’s Wood Fund Limited, and Ebisu Global Opportunities Fund.
The opening of the issuance of FCCBs is Tuesday, and the conversion price of Rs 160.20 per equity share includes an equity premium of Rs 159.20 a share, it said. The floor price is Rs 152.45 per equity share, the company added.

Last month, the board had considered and given its in-principle approval for raising funds by up to Rs 2,000 crore through the issue of securities through all permissible modes in one or more tranches, including but not limited to private placement, a qualified institutions placement (QIP), preferential issue or other methods.

At 11:15 AM, ZEEL, the top gainer among Nifty Midcap 100 index, was up 6.2 per cent at Rs 156.30. In comparison, the Nifty 50 and Nifty Midcap 100 index were up 0.89 per cent and 0.38 per cent, respectively. A combined 26.16 million shares changed hands on the NSE and BSE.

However, thus far in the calendar year 2024 (CY24), ZEEL has underperformed the market, falling 45 per cent, as compared to nearly 13 per cent rally in Nifty 50. The stock had hit a 52-week low of Rs 125.50 on June 4, 2024.

ZEEL in Q4FY24 earnings update said that the major work is already underway to implement identified margin improvement interventions across the business. Based on these efforts, our visibility and confidence on performance enhancement plan has further improved, the company said.

Q1FY25 (April to June quarter) will see most of one-time higher costs towards implementing the interventions, offsetting underlying operating performance improvements and causing softness on margins.