Mukesh Ambani, Sunil Mittal vying for stake in Subhash Chandra’s ZEEL: Report
MUMBAI: The telecom war between billionaires Mukesh Ambani and Sunil Bharti Mittal might spill over to the media sector with both business tycoons vying for stake in media conglomerate Zee Entertainment Enterprises Ltd. (ZEEL).
Mukesh Ambani has disrupted the telecom market with Reliance Jio while Sunil Bharti Mittal’s Bharti Airtel is trying to fend off competition from the former.
According to a Bloomberg report, Mittal’s Bharti Airtel has started due diligence of ZEEL and is expected to make a formal proposal soon. The report quoting unnamed individuals as saying that Ambani’s Reliance Jio Infocomm is also considering a bid.
It also noted that the deliberations are preliminary and may not lead to a transaction.
Subhash Chandra’s debt-ridden Essel Group is offloading up to 50% promoter stake in its crown jewel ZEEL to pay off debt. ZEEL promoters are scouting for a strategic investor to help them prepare for the future and at the same time bring down debt through stake sale.
According to a report by The Economic Times, ZEEL was negotiating with Sony Corporation and Comcast as potential partners. However, the talks with Sony Corp broke down over valuation.
ZEEL had also denied reports that it is in talks with Sony Corporation and Comcast to sell promoter stake at Rs 540-560 per share. CNBC-TV18 had reported that the promoters of the company are in talks with Comcast and Sony to sell over 50% of their holdings to repay debt.
In January, the Essel Group had sealed a formal agreement with its lenders, under which it gets time till September to deleverage or pare its debt. On 25th January, Essel group companies saw a combined erosion of Rs 13,352 crore in market valuation following reports that a promoter entity is being probed for cash deposits after demonetisation.
On 26th January, Essel Group chairman Subhash Chandra had promised that he will clear the debt of lenders by selling promoter stake in his crown jewel ZEEL. He had also admitted having made wrong decisions like making incorrect bids in the infrastructure business and the merger of direct to home (DTH) operator Videocon d2h with Dish TV.
He had also alleged that some negative forces are out to sabotage his efforts to raise money through a strategic sale in the flagship company ZEEL.