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Zee Media gets SEBI nod for Rs 200 cr rights issue

MUMBAI: News broadcast company Zee Media Corporation Ltd (ZMCL) has received clearance from the market regulator Securities and Exchange Board of India (SEBI) for its proposed Rs 200 crore (Rs 2 billion) rights issue.

ZMCL had filed a draft letter of offer with the market regulator in January to raise money through rights issue. In a rights issue, the company issues shares to existing investors in line with their holding at a pre-determined price and ratio.

The regulator issued its final ‘observations’ on ZMCL’s draft offer document on 18 February. It had last month sought clarification from the merchant banker regarding the issue.

The company plans to utilise Rs 45.02 crore (Rs 450.20 million) out of the net proceeds towards purchase of equipment and accessories for production and broadcasting; Rs 45 crore (Rs 450 million) towards repayment of certain loans; and Rs 60 crore (Rs 600 million) for funding subsidiaries for repayment of loans.

The remaining amount would be used for other general corporate purposes.

The company had clarified in the draft letter of offer that the use of the net proceeds would be at the discretion of the company, subject to the issue proceeds being utilised for the purposes disclosed in the objects of the issue.

ZMCL owns 10 news channels including two national channels—Zee News (Hindi) and Zee Business—and eight regional channels, including Zee 24 Taas, 24 Ghanta, Zee Sangam, Zee Madhya Pradesh Chhattisgarh, Zee Purvaiya, Zee Marudhara, Zee Punjab Haryana Himachal and Zee Kalinga.

In October 2014, the board of directors of the company had approved raising funds not exceeding Rs 200 crore through issue of equity shares of the company to its eligible shareholders.

Axis Capital is the lead manager of the issue.