Zee Entertainment gains after board OKs arrangement with DMCL

Zee Entertainment Enterprises rose 2.57% to Rs 289.05 at 13:53 IST on BSE after the company's board approved the scheme of arrangement with Diligent Media Corporation.

The announcement was made during trading hours today, 17 December 2013.

Meanwhile, the BSE Sensex was up 42.77 points, or 0.21%, to 20,702.29.

On BSE, so far 1.33 lakh shares were traded in the counter, compared with an average volume of 1.51 lakh shares in the past one quarter.

The stock hit a high of Rs 291.95 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 279.05 so far during the day. The stock hit a 52-week low of Rs 194.30 on 16 April 2013.

The stock had outperformed the market over the past one month till 16 December 2013, rising 1.59% compared with the Sensex's 1.28% rise. The scrip had also outperformed the market in past one quarter, rising 26.49% as against Sensex's 4.65% rise.

The large-cap company has an equity capital of Rs 96.03 crore. Face value per share is Re 1.

The board of directors of Zee Entertainment Enterprises (ZEEL) approved the scheme of arrangement between the company and Diligent Media Corporation (DMCL) for the demerger of the media business undertaking from DMCL and vesting into the company. DMCL is an Essel Group company.

Media business undertaking comprises the media and entertainment business of DMCL including event management activities, TV channel license and TV reality show formats for game based shows. The said business will be demerged from DMCL and vest with the company, by way of scheme of arrangement, ZEEL said in a statement.

ZEEL will issue 2.23 crore redeemable, non-convertible preference shares of Re 1 each (i.e. one preference share of Re 1 each for every four equity shares of face value of Rs 10 each of DMCL) on vesting of media business undertaking with it. The preference shares would have a tenure of three years and carry a coupon of 6% per annum, the company said.

The appointed date for the scheme of arrangement will be 31 March 2014 and the scheme is subject to necessary approvals from the shareholders, creditors and regulatory authorities including the stock exchanges and the Bombay High Court.

Zee Entertainment Enterprises' consolidated net profit rose 25.9% to Rs 236.27 crore on 15.5% growth in net sales to Rs 1101.28 crore in Q2 September 2013 over Q2 September 2012.

Zee Entertainment Enterprises is one of India's leading television, media and entertainment companies. It is amongst the largest producers and aggregators of Hindi programming in the world, with an extensive library housing over 1,00,000 + hours of television content.

Zee Media Corporation is the largest news network in India, comprising of Zee News, Diligent Media Corporation and India Web Portal.

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