We want to be a truly global media company in the future: Punit Goenka
MUMBAI: Media conglomerate ZEEL’s MD and CEO Punit Goenka has said that the promoters are looking to part with half their shareholding to a strategic partner as they want the company to go global beyond the South Asian diaspora.
“I need to go beyond the South Asian diaspora and be a truly global media company for the future. I do not wish to remain just a South Asian player anymore,” Goenka told analysts during a conference call post the announcement that the promoters are looking to offload up to 50% of their shareholding in the company.
He also said that the promoters have a solid intent of bringing in a strategic investor and there is no going back on the same. Goenka said that the strategic partner has the option of coming in at the parent level as well as at the step-down subsidiary level.
He also answered in the affirmative when asked whether the stepdown subsidiary level will be the ZEE5 business. “I would assume that any technology partner would look for that as the prime objective,” he added.
Queried as to why the promoters are willing to dilute so much stake, Goenka said that any strategic partner coming on board would want an equal footing with the promoters or at least the option of an equal footing with the promoters to even consider it to be strategic investment from their side.
“We have said, it is an up to 50% depending on what the strategic partner would like. If the strategic partner is happy with 10%, we will be happy with 10% itself. So, there is no commitment that we are going to sell all of the 50% of our holding,” he noted adding that the promoter group will continue to remain the single largest shareholder.
On the high levels of shares pledged by the promoters, Goenka said that the process of bringing the pledge levels down for the promoters had started six months back.
“The promoters are exiting some of the infra businesses which have reached maturity levels like our transmission business, our solar business, and our roads business. That process was started 6 months back and that should pretty much take care of the pledge issues of the promoters. This in no way is a way of deleveraging the promoters pledge issues, this transaction or this development,” he said.
Goenka also revealed that ZEEL had received several proposals in the last few months which triggered the process of scouting for a strategic partner. “We have some serious interest over the last few months from several players, or few players, at least,” he stated.
He also stated that this is the right time to get in a strategic partner considering the pace at which technologies are converging. “The reason why we want to look at this is because the technologies are converging so fast that we do not want to miss the bus and that could happen over the next 3 to 5 years itself, which is a very short-term outlook from this industry perspective,” he added.
The two key things that ZEEL is expecting from the strategic partner is technology and access to a wider geography. From the strategic partner’s perspective, an investment in ZEEL will give them access to the fast-growing Indian market.
“I do not think there is another asset like ZEE available out there which can be had on a platter. I think to build it from ground, anybody will take at least a decade if not more. And multiple billions of dollars to access this market, to even attempt to reach the position ZEE is at today,” Goenka said.
“Having said that, from our perspective, it is not just technology that we are looking for. Definitely, if somebody who can catapult us to take our product, in terms of technology and geographical reach beyond the South Asian diaspora, we would be looking for from our perspective.”
Essel Group head of finance and strategy Himanshu Mody said that there will be a bid-ask not only on the quantum of stake but on pricing as well. The company is confident of completing the process by March/April 2019.