Zee Entertainment’s (Zee’s) Managing Director and Chief Executive Officer Punit Goenka has been reappointed to the position, effective January 1 next year, the broadcaster said on Tuesday, as lenders prepare to sell their pledged shares.
In a statement to the stock exchanges, Zee said that an in principle approval for Goenka’s reappointment for a period of five years was finalised by its board of directors in a meeting. Shareholder approval, it said, would be subsequently sought.
Goenka, who is the elder son of Essel group promoter and Zee chairman Subhash Chandra, has been MD of the media firm since January 1, 2010.
He was appointed CEO in July 2008 after then CEO Pradeep Guha stepped down. The top-level rejig at that time was viewed as Chandra's attempt to put succession planning in place at Zee, which is the flagship firm of the Essel Group.
While Zee is among the leading broadcasters in India, the others being Star, Sony and Viacom18, the firm in the last one year has faced intense scrutiny amid concerns over mounting debt.
Almost 96 per cent of the promoter stake of 22.37 per cent in Zee is pledged to lenders. Of this, 10.71 per cent is pledged to VTB Capital, the investment arm of Russian financial services major VTB Group.
Last month, VTB Capital said it had received lender protection rights in Essel Media Ventures, a promoter group entity, whose shares were pledged to it against loans taken by the latter. Essel Media holds 10.71 per cent in Zee.
The announcement by VTB Capital had paved the way for a likely sale of its pledged shares in Zee, though Goenka insisted in a subsequent concall with analysts that his firm was in "active dialogue" with the former. VTB has since appointed investment bankers for the sale process, including JPMorgan and Citigroup.
VTB’s action, media industry sources said, had emboldened other lenders of Zee to sell their pledged shares, who've begun the process by transferring their shares to an escrow account.
Zee on Monday denied any such transfer of pledged shares to an escrow account, maintaining it was in dialogue with prospective investors as well as lenders as part of its stake sale process.
So far, 8.7 per cent of the promoter stake in Zee has been sold to Invesco Oppenheimer out of the 11 per cent that was agreed upon to be sold to the fund house in August.
The deal size was pegged at Rs 4,224 crore, bringing down the promoters' loan against shares to Rs 7,000 crore.