Subhash Chandra is set to lose control of Zee Entertainment. The promoters of Essel group on Wednesday announced the selling of a 16.5 per cent stake in Zee Entertainment (ZEEL) to financial investors, including OFI Global China Fund, in a move to repay its debt.

“The Group seeks to sell up to a 16.5 per cent stake in ZEEL to financial investors, in order to repay loan obligations to certain lenders of the Group for whose benefit such shares are currently encumbered (and who have consented to such share sale by the Group),” Zee Entertainment said in a statement.

Of the 16.5 per cent stake, Essel group will sell about 2.3 per cent in Zee Entertainment to OFI Global China Fund, LLC and/or its affiliates.

OFI is a subsidiary of Invesco Oppenheimer, which had earlier reached an agreement with the promoters of Zee to buy an 11 per cent stake for ₹4,224 crore.

Post the deal, Subhash Chandra and his son Punit Goenka will hold only about 5 per cent in their flagship group firm Zee Entertainment.

The promoters currently owe about Rs 7,000 crore to mutual funds and financial investors including Russia's VTB Capital, which currently has encumbered about 10.71 per cent of Zee Entertainment shares.

“Post the transaction, overall holdings of the Group in ZEEL will be 5 per cent, out of which encumbered holdings of the Group will reduce to 1.1 per cent of ZEEL,” the statement said.

“The Group is also working actively on further divestments, including its media/ non-media assets, and remains confident to complete the same,” the Zee statement said.