Zee Shareholders Reject Promoter Warrant Issue On Low Voting Support

Shareholders of Zee Entertainment Enterprises Ltd. have voted down the company’s proposal to raise ₹22.37 billion by issuing warrants to promoter group entities, Zee informed stock exchanges on Thursday. Only about 60% of participating shareholders supported the resolution, short of the 75% threshold required for a special resolution.

The company board said it appreciated the support from shareholders who backed the proposal, and reiterated the importance of building a financial buffer to withstand market disruptions and intense competition.

In June, Zee’s board had approved issuing 169.50 million fully convertible warrants at ₹132 apiece to Sunbright Mauritius Investments Ltd. and Altilis Technologies Pvt. Ltd., promoter group entities. Had the deal gone through, Subhash Chandra and family’s stake in Zee would have risen to 18.39% from the current 3.99%.

While some institutional investors and proxy firms had endorsed the move, others flagged concerns over pricing, the need to raise funds through warrants, and the choice of instruments. During an investor call, Chandra defended the fundraise as essential to help Zee compete with much larger rivals, and said the promoters weren’t pledging shares or taking loans to finance the infusion.