New Delhi: Punit Goenka, Zee Entertainment Enterprises Ltd founder Subhash Chandra’s elder son, will take over as managing director as part of a restructuring process. The board approved his appointment for a five-year term beginning 1 January. Goenka’s current term as whole-time director and chief executive will expire on 31 December.
The company also acquired Zee’s Regional General Entertainment (R-GEC) business from Zee News Ltd. From 1 January, six television channels of Zee News Ltd—Zee Marathi, Zee Talkies, Zee Bangla, Zee Telugu, Zee Kannada and Zee Cinemalu—will come under Zee Entertainment through a share-swap agreement approved by the board.
New role: Zee Entertainment MD-designate Puneet Goenka.
The firm informed the Bombay Stock Exchange that the proposed demerger would be funded by the issuance of new shares by Zee Entertainment to shareholders of Zee News and the share swap ratio has been proposed at 4 equity shares of Re1 each of Zee Entertainment for 19 equity shares of Re1 each held in Zee News, as a consideration for the demerger of the R-GEC business undertaking.
“We have taken proactive measures to unlock shareholder value in Zee News Ltd,” Chandra, chairman, Zee News, said in a statement issued to the media.
The move reflects consolidation and cost realization, said Rohit Maheshwari, analyst with brokerage KR Choksey Shares and Securities Pvt. Ltd. “These six channels under Zee News required a separate team, which would not be the need any more under Zee Entertainment since it already has the expertise,” he said.
“Considering the positive results by Zee’s regional channels it makes sense for them to concentrate on these and consolidate them with their other GECs.” Shareholders of Zee Entertainment stand to gain as they will get additional Zee News stock, he said.