 "Zee")
Shares of Zee Entertaiment Enterprises (ZEEL) plunged as much as 14.3 per cent to Rs 165.5 apiece on the BSE in Wednesday's intraday trade after two negative newsflows hit investor sentiment.
First, the company has clarified that it is not involved in any negotiations with Sony Group, and that the news is factually incorrect. READ HERE
On Tuesday, The Economic Times reported that Zee Entertainment and Sony Group have held discussions that may save the $10 billion merger the Japanese conglomerate had called off on January 22.
Citing sources, the report added that Punit Goenka, managing director and chief executive officer (CEO) at ZEEL, has agreed to Sony's demand that he not become the CEO of the merged entity. The Japanese major has maintained that Goenka can be an adviser to the merged entity at best.
It also said that Zee will inform Sony if it is willing to accept the terms and conditions over the next 24 to 48 hours. If Zee disagrees, Sony will pull its original application from the National Company Law Tribunal by the end of the week.
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At 10:00 AM, the stock was quoting 11.4 per cent lower at Rs 171 per share as against 0.2 per cent rise in the benchmark S&P BSE Sensex. About 48.2 million shares have already changed hands on the counter on the NSE and BSE thus far in trade.
Meanwhile, souring the sentiment further is a report by Bloomberg which states that market regulator Securities and Exchange Board of India (Sebi) has found a hole of more than $240 million in the accounts of ZEE.
As part of its investigation into the Zee founders, the report said that the Sebi found that about Rs 2,000 crore ($241 million) may have been diverted from the company. That's roughly ten times more than initially estimated by Sebi investigators.
The amount found missing is not final and may change after Sebi reviews the responses from the company executives, the people said. READ MORE
At the bourses, shares of ZEEL have crashed 30 per cent so far in calendar year 2024 (YTD-CY24) as against around 2 per cent gain in the benchmark indices.
During the October-December quarter, Zee Entertainment Enterprises reported a 140.74 per cent year-on-year (Y-o-Y) jump in net profit at Rs 58.5 crore, but its Ebitda dipped 42.9 per cent Y-o-Y to Rs 209.2 crore.
The Ebitda margin stood at 10.2 per cent, down from 17.4 per cent last year.
