New Delhi: Shareholders of Zee Entertainment Enterprises Ltd have rejected a proposal to raise Rs 2,237.44 crore from promoter group entities, which would have led to an increase in promoter shareholding to 18.4 per cent, according to a regulatory filing.
The special resolution to issue fully convertible warrants to the promoter group on a preferential basis received only 59.514 per cent of the votes in favour, while 40.48 per cent were against the proposal, according to the filing by Zee Entertainment Enterprises Ltd (ZEEL) on Thursday evening. Being a special resolution, it needed 75 per cent shareholder approval.
The company's scrutiniser, in its report, said, "as the number of votes cast in favour of the resolution was not more than three times the number of votes cast against, the special resolution has not been passed with requisite majority".
Last month, ZEEL said it planned to raise Rs 2,237.44 crore from promoter group entities, which will lead to an increase in promoter shareholding to 18.4 per cent.
The board of the company approved "issue of up to 16.95 crore fully convertible warrants, for consideration to be received in cash" to Altilis Technologies and Sunbright Mauritius Investments, Promoter Group entities, on a preferential basis.
In a statement, a company spokesperson said its board and the management have noted that around 60 per cent 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," the spokesperson added.
Asserting that the company "continues to progress swiftly towards realising its ambitions by leveraging its cash reserves, prudent approach and entrepreneurial spirit", the spokesperson said.
"While the efforts being taken have augured well for the company, in order to further safeguard it from a future growth perspective, it is important to keep a sufficient war chest available in order to consistently build a strong foundation to address the rapid market shifts and outperform the fierce competition," he added.
Norges Bank Investment Management that oversees the Government Pension Fund Global, among the single largest shareholders in the company, had indicated it would vote in favour of ZEEL's proposal. Meanwhile, Proxy advisory firm Glass Lewis had also advised ZEEL's shareholders to vote in favour of the special resolution.
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