Shares of Zee Entertainment Enterprises Ltd. are trading as much as 3% lower on Thursday, July 2, after the company's board approved a capital infusion of up to ₹3,143.52 crore through a preferential issue of fully convertible warrants to promoter group entity Sunbright Mauritius Investments Ltd.
According to the company's exchange filing, the board approved the issuance of up to 24.95 crore fully convertible warrants to Sunbright Mauritius Investments at an issue price of ₹126 apiece, taking the total fund raise to ₹3,143.52 crore.
The company had earlier informed exchanges that it was evaluating a fund raise to support its strategic and business growth initiatives.
As part of the transaction, Sunbright Mauritius Investments will pay an upfront subscription amount of ₹31.50 per warrant, equivalent to 25% of the issue price. The remaining ₹94.50 per warrant, or 75% of the issue price, will be payable at the time of conversion. The investor has up to 18 months from the date of allotment to convert the warrants into equity shares.
Each warrant is convertible into one fully paid-up equity share with a face value of Re 1 at an issue price of ₹126, comprising a face value of Re 1 and a securities premium of ₹125.
The issue price is at a 16.33% premium to the stock's closing price and an 11.86% premium to the price determined under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The company said any warrants that remain unexercised after the 18-month period will lapse, with the subscription amount already paid being forfeited.
The warrants may be converted into equity shares either in one tranche or in multiple tranches during the 18-month conversion period.
Separately, the board also approved the introduction of ESOP 2026, subject to shareholder approval. Under the proposed employee stock option scheme, the company may grant up to 3.74 crore stock options, with each option convertible into one equity share of face value Re 1 at an exercise price of ₹126. The scheme will be implemented in accordance with applicable SEBI regulations and other prevailing laws.