Zee Entertainment has received board approval for raising funds via an issue of 10-year foreign currency convertible bonds (FCCBs) of up to $239 million (Rs 1,997 crore), according to an exchange filing. The fund-raising, which began on Tuesday, would see the FCCBs carry a coupon rate of 5% and be issued to Resonance Opportunities Fund, St. John’s Wood Fund and Ebisu Global Opportunities via a private placement, the company said.
The FCCB issue comes after the firm received board and shareholder approval to raise Rs 2,000 crore in funds to enhance its strategic flexibility and support future growth opportunities in the media industry.
Investors can convert these bonds into equity shares at a rate of Rs 160.20 per share, which includes an equity premium of Rs 159.20. If all FCCBs are converted, 124.6 million equity shares, each with a face value of Rs 1, will be issued. The company has set the floor price for the FCCBs issue at Rs 152.45 per share. The fundraising move by Zee has come after Sony scrapped its $10-billion merger in January.
Since then, the media firm has announced a slew of measures to cut costs and reduce losses in its business, including cutting 15% of its workforce. It also announced a remodel of the company’s leadership structure as part of its restructuring measures.
