Essel Group’s Zee Entertainment Enterprises Ltd said that it has received its board of directors' approval to take over media business undertaking of group company Diligent Media Corp Ltd (DMCL).

Media business undertaking of Diligent Media, which is best known as the publisher of DNA newspaper, comprises event management activities, TV channel licencing and TV reality show formats for game based shows. This will leave DMCL with its print media business under DNA.

According to the deal, the company will issue 2.23 crore redeemable, non-convertible preference share of Re 1 each to the shareholders of Diligent Media for every four shares of face value of Rs 10 each of DMCL.

The preference shares would have tenure of three years and carry a coupon of 6 per cent per annum.

The share swap has been based on the valuation reports submitted by independent valuer Sharp & Tannan and fairness opinion given by Axis Capital, the statement said.

Subhash Chandra-led Essel Group had formed DMCL as a joint venture with DB Corp around eight years ago. Last year Essel group acquired DB Corp’s stake in the venture.

The deal would in effect mean Zee Entertainment issuing preference shares to its own promoters.

(Edited by Joby Puthuparampil Johnson)

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