Zee Entertainment Enterprises, which has been facing an array of issues after the proposed $10-billion merger with Sony fell through and the resultant issues, has said its board has approved fundraising of up to Rs 2,000 crore via issuance of shares or eligible securities.
The news sent Zee shares rallying 5 percent at Rs 153.75 apiece on the BSE on Thursday. The stock has gained 12.5 percent in a month, despite falling revenues and inability to fund a buyer.
Zee had earlier said it would consider fundraising by way of issuance of equity shares and/or via private placement, a qualified institutional placement, preferential issue, or any other method or combination of methods subject to such approvals as may be required.
The fundraising approval comes after the Japanese major Sony scrapped its $10-billion mega merger earlier in January this year with Zee. The merger was agreed up on in December 2022 but issues about control and the likely continuation of Puneet Goenka as the chief executive led to Sony calling of the deal.
Since then, the media company has announced a slew of measures to cut costs and reduce losses in its business, including cutting 15 percent of its workforce. It has also rejigged its leadership structure.
Last month Zee voluntarily withdraw the merger implementation application from the NCLT against Sony.
In the March quarter, Zee reported a profit of Rs 13.35 crore against a loss a year ago, helped by strong demand for advertising and a fall in expenses. Domestic advertising revenue rose nearly 11 percent on-year, driven by the continued recovery in ad revenue and spending pickup by fast-moving consumer goods clients