<Nov 5, 19> Bexley Advisors Quoted in MoneyControl: "Zee5 Could Benefit from Content Rich Acquirer"
Updated: Mar 30, 2020
... While Utkarsh Sinha, Managing Director of Bexley Advisors, a boutique investment bank, said that it is difficult to ascertain whether lenders are going ahead with Zee stake sale, he did put a perspective in place.
"Think about it from the point of view as a strategic investor who is negotiating with Zee. That same strategic investor has the option of having a conversation with lenders and get in a controlling position. There is always that possibility of a strategic investor, whois serious about the acquisition, that he does not have to go via Zee. Of the 22 percent shares the promoters have, about 20 percent is pledged. Hence, their (promoters) controlling stake is going to go down. They have to come to terms with the fact that they will be not in control of the company in the long-term unless they find a solution," said Sinha.
Explaining about the mechanics of the solution, he said: "If somebody would take up their (Zee) debt in a consolidated way, then it would be interesting. A lender would be willing to take a haircut while unloading the stocks. So, they won't be able to recover the full value of the loan. If somebody has confidence in the promoters to let them be in control, do a side deal with them, take over the debt. This could be a rescue plan which could give Zee a new lease of life."
"The OTT business will go through a lot of change. Zee5 could benefit immensely from a content rich strategic acquirer who comes with their library. Married to their reach, there could be a potent play here," said Sinha.