Zee Entertainment shares decline as it fails to get 75% shareholder votes for promoter warrants

Shares of Zee Entertainment Enterprises Ltd. declined over 6% on Friday, July 11, after the special resolution to approve the issue of convertible warrants, to infuse capital worth ₹2,237 crore, to promoters failed to get the requisite votes.Around 59.5% shareholders voted in favour, while 40.5% voted against the same. Special resolutions typically require a minimum of 75% votes to be passed.

“The Board and the management of the company have noted that 60% of the shareholders who participated in the voting process, have expressed their support towards the resolution pertaining to the issuance of fully convertible warrants to promoter group entities, and are grateful for their support. The board and the management also respect the decision taken by the remaining shareholders,” a company spokesperson said.

Earlier, three proxy firms – IiAS, SES, InGovern – had recommended voting ‘no’ on issue of warrants to shareholders of Zee Entertainment.

Their concerns and key objectives were:

• Rationale for raising funds via warrants is unconvincing given the 2,410 crore cash on books.
• Choice of financial instrument, 15% dilution for non-promoter shareholders.
• As a result, the promoter shareholder will not rise from 3.99% to 18.39%.In December 2024 as well, shareholders had rejected the appointment of Punit Goenka, a promoter of the company, as managing director.

Zee Entertainment shares declined 6.2% to hit an intraday low of ₹137.95 apiece. The stock was down 4% at ₹136.2 apiece around 9.25 am.

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