Zee decides to induct strategic partner

Alok Agarwal
06 June 2001

After weeks of denial, Subhash Chandra, chairman of the Zee group, has finally admitted that Zee Telefilms is planning to induct a strategic partner who is likely to be an international media major. This comes close on the heels of its proposed ADR issue not taking off.

According to Mr Chandra, the induction of the strategic partner is being done to achieve faster growth and make its Zee Network a truly global entity. He believes that the induction of the international partner would help enhance shareholder wealth as well as increase enterprise value. He also stated that, while representing a departure from its earlier policies, this move was in line with international trends and was keeping in mind the global media scene.

It is understood that the incoming international partner will have synergies with Zee Network and would help distribute Zee's products globally, besides giving it technological impetus and access to capital markets.

The company is in the process of appointing an investment banker for this purpose and it is expected that the entire exercise of inducting the partner would be completed in the next three to four months. The induction could be through issue of additional shares in the company or through divestment of stake by the promoters. As per the latest shareholding pattern, promoters hold 60 per cent of the equity of the company, 19 per cent is held by the FIIs, 7 per cent by the Indian financial institutions, 3.8 per cent to 4 per cent by Star and the rest by the public.

Replying to a question raised by domain-b, Mr Chandra said the incoming partner could also be Sony or Star. "There are no permanent enemies in this business", he said.

Earlier R K Singh, chief executive officer, Zee Network, pointed that the growth of the media industry in South Asia had been pioneered by Zee, which today is the ninth most well known brands in the country. He said so far Zee had grown in an organic manner, giving the option to its viewers to watch its bouquet of 13 channels but this had to change.