Zee deal took just 45 minutes over breakfast : Punit Goenka

It’s not a difficult choice once you come to terms with it. I came to terms with it on January 25 itself. The momentum on the deal picked up only after the elections because anyone from outside the country making that kind of investment in India just around the general elections wanted to be certain, especially when the rumour mill on the election was of chalk and cheese.

My first preference was a strategic partner. But I had to keep financial investors as backup ready and that’s what I was doing. It’s unfortunate the strategic partner didn’t understand the gravity of the situation. And the time lines they wanted to close the deal was not in line with what we needed. So we took a hard decision that we’ll go with a financial investor.

Even the strategic investors I had spoken to wanted us to run the company. One investor wanted full control. We were open to that as well but its just that the timelines did not work out for us given the September deadline to pay off our debt.

It’s not just money. Our aspiration to be a media company from the emerging markets has not changed. We believed a strategic partner would’ve helped us do that. Our DNA is to think about content, it is not to think about technology. Therefore, a strategic partner would have been better. Now we will have to work out alliances but right now our focus is to run the company, continue to build Zee5, continue to build the broadcasting portfolio. We’ll start thinking next year about what we want to do once this debt issue is settled.

Valuation was secondary. They made an offer and I didn’t even negotiate it. My question to them was can you meet my timeline. They said they cannot meet my timeline. We were very open to sell to even the investors who wanted complete control as long as they took care of the entire debt situation.

My priority now is to pay off debt. If there is any short fall after selling the non media asssets, I’ll have to generate from the media assets. My estimation is that I will be left with significant shareholding, which will be motivating enough for us to continue to work with the same vigour and passion with which we’ve built the company.

We have non-binding term sheets already with us. This deal will give our corporate team some strength to negotiate harder. Because suddenly, ₹4,200 crore of liquidity will come into the group. That will ease the pressure. We will completely exit non-media assets. Earlier we were expecting a huge amount to come from them. Obviously, they will not come to those numbers but it will be reasonable. After that, we might still have to sell about additional 4-5 per cent stake in Zee.

Yes because Oppenheimer will not be able to buy those stakes because they have a technical cap of 20 per cent on a single scrip. They already had 8 per cent stake in the company. Oppenheimer and us will jointly look at whom can we bring in as the next financial investor.

The concern over debt is more or less over. Other than that it’s business as usual. Teams have been working hard, growth is coming. We will exit all non media business so our entire focus will be fully on media.

For an investor who has been with us for 17 years I doubt Invesco Oppenheimer will do anything like that. Then you are telling the world that you do such thing behind the back of promoters, which is not a good reputation to have in the financial markets. It’s a two-way relationship. If I was not a good partner to them why would do they do this investment. If they want to exit at some point we can sit together and work it out. If liquidity improves even we can buy it back from them.

Not at all, It took hardly 45 minutes over a breakfast.

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