The US-based fund Invesco Oppenheimer Wednesday agreed to pick up an additional 11 percent in the fund-starved Zee Group flagship Zee Entertainment Enterprises (Zee) for Rs 4,224 crore ( ~ US$ 613.5 million). The equity will be picked up by the Atlanta-based
global fund house's Developing Markets Fund, which already owns 7.74 percent in the company, a company statement said.

Invesco Oppenheimer has been a financial investor in Zee since 2002.

"Invesco Oppenheimer Developing Markets Fund has agreed to make an additional investment in Zee. It has agreed to buy up to an 11 percent stake more in Zee from the promoters, for Rs 4,224 crore," it said in a statement.

The promoters, who have been since last November trying pare their stake by even half, own 35.79 percent in Zee as of June 2019, of which 63.98 percent has been pledged with mutual funds and other financial institutions. Following this
deal, promoter stake will come down to around 23 percent.

As per media reports, the promoters' stake is estimated to be around Rs 13,000 crore at current market price
with market capitalization of Rs 34,717.3 crore at a closing price of Rs 361.45 Wednesday.

From last year, the Essel Group was trying to divest its key assets, with an aim to repay all the lenders by
September 2019.

The group claimed that during the divestment process, it received positive response from multiple partners
expressing interest to buy the stake in Zee and the other key non-media assets.

"I am glad to share that Invesco Oppenheimer Developing Markets Fund as a financial investor has further reposed its faith in Zee, showing their strong belief and trust in the intrinsic value of our assets," Zee managing director and chief executive Punit Goenka said.

Last November, Subhash Chandra-led Essel Group had decided to sell up to 50 percent of their equity in Zee to a
strategic partner. In January, Chandra had admitted that his company was in a financial mess, and blamed it on aggressive bets on infra, which has gone out of control since the IL&FS crisis, and acquisition of Videocon's D2H business.

In a open letter late January, Chandra had said the promoters would repay the debt to the bankers, NBFCs and
mutual funds.

A month later, the company sealed a formal standstill agreement with its lenders to keep it afloat, under which it
gets time till September to deleverage or pare its debt.

The Essel Group termed the stake sale in Zee to Invesco Oppenheimer is a strong step in the overall divestment process, giving the promoters the required financial fillip to initiate the repayment process. Along with Zee, the group is also in the process of divesting some of its non-media assets.

"We are confident to complete the overall process of repayment, well within the agreed timeline of September," the
statement said.

Ahead of the deal announcement in the evening, the Zee counter was the top loser in the Nifty shedding 5.2 percent to
close at Rs 361.45 against the index closing with a marginal 0.27 percent gains after a week of heavy losses. PTI DS

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