Zee To Offload 10% Stake In Siti Cable
The Subhash Chandra-promoted Zee Telefilms (ZTL) has decided to offload 10 per cent stake in its wholly-owned subsidiary, Siti Cable, and prune its proposed American depository receipts issue to $ 250 million from $1.5 billion. The divestment will be through private placement with foreign institutional investors.
The ADR issue is tentatively slated for August-September, 2000. The company's decision to raise money through a combination of ADRs and divestment marks a sharp rethink on its earlier plans.
The company had obtained a blanket shareholder approval for raising $1.5 billion, or Rs 6,400 crore, through the ADR route.
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Confirming the move, ZTL vice-chairman and managing director Vijay Jindal said, "The initial plan was to raise $500 million immediately through an ADR issue. Now, we are planning to raise $250 to $300 million by selling less than 10 per cent in Siti Cable."
Jindal, however, did not give any reasons for the change in plans. He said the shareholder nod for the $1.5 billion ADR issue was only an enabling resolution as the company did not want to repeatedly approach its shareholders for fresh ADR floats.
Zee is planning to file the offer document for its ADR issue with the US market regulator, Securities & Exchange Commission, sometime in June. Approval for such an issue generally takes eight weeks after the filing of the document.
Investment bankers Donaldson Laffkin Jenerette (DLJ) and DSP Merrill Lynch are the lead managers to the issue. One of the co-lead manager is HSBC Securities. The company is presently discussing the formalities and legal procedures with their merchant bankers.