ZEE-Sony Merger: The Political Matrix
In August 2021 Mr Chandra announced that he had paid off 91% of his debts by diluting promoters’ share and was confident to pay the rest very soon. At this very time, it was reported that the rest of the unpaid debt amounted to Rs 7000 crore confirming the total amount of his debt for the first time. This was clearly in preparation for the merger with Sony Pictures Network India, a subsidiary of Sony Corporation of Japan.
He says: “Invesco are a good investor but they are not transparent about who they are going to change the management with. Is there some other agenda. Let the shareholders decide the fate of the company. The regulator also has the responsibility that the minority shareholders’ interest should be kept in mind”. Subhash Chandra and his family are now minority shareholders after pledging their share to pay of the huge debt of the company as reported by Go News earlier. Original Article, 23rd September 2021: Only last month ZEE TV was in the news for being one of the largest debt-ridden companies in the country, a whopping Rs 71000 crore, just shy of $10b mark. On Wednesday its share zoomed 31% and it was the top story of the pink papers and business news channels. India’s first private TV channel launched in 1992 by a Haryana based commodities trader, Subhash Chandra, was the showcase story of how market liberalization in India had spawned a culture of entrepreneurship and market success. ZEE reaches 1.3 billion people across 173 countries in the world with a bouquet of 49 channels with a market share of 18% in a very competitive entertainment TV market. But troubles fell upon the TV giant once Mr Chandra, an astute businessman, became increasingly involved in what he loved most- politics. After his ideologically aligned party BJP came to power in India in 2014. He was dabbling in the elections of his home state and apparently had little time for his empire. He finally got a berth in the Indian Parliament’s Upper House, the Rajya Sabha. But the price was too high, though his son, Punit Goenka was at the helm of the company’s affairs. In August 2021 Mr Chandra announced that he had paid off 91% of his debts by diluting promoters’ share and was confident to pay the rest very soon. At this very time, it was reported that the rest of the unpaid debt amounted to Rs 7000 crore confirming the total amount of his debt for the first time. This was clearly in preparation for the merger with Sony Pictures Network India, a subsidiary of Sony Corporation of Japan. Now the two companies together have a share of nearly 30% of viewership and become the larger entertainment behemoth than Star India network which was recently sold by Rupert Murdoch to Disney. A look at the numbers behind this mega merger clearly tell the story that Sony is now a larger partner with 52% stake though ZEE has a larger footprint in India and an unenviable reach across the world. However, ZEE has only Rs 623 crore or $85m cash balance according to its latest annual report while Sony has a cash balance of $1575m which it will now deploy to bail out its Indian counterpart. In the end, Mr Chandra keeps the control of ZEE News and its various language channels which initially gave him the influence in the Indian market. A must for someone with larger than life political ambitions.