Subhash Chandra promoted Zee Telefilms has reached an arrangement with AOL Time Warner, where the global media giant will invest over Rs 700 crores for a 10 per cent equity in Zee Telefilms.
This was reported by Hindustan Times in a detailed story yesterday.
The Zee’s scrip made some smart gains on the stock exchange in expectation of this development.
The structure of the proposed deal is unique and revolves around an 18 month optionally convertible warrant, which allows AOL Time Warner to exist with no loss. The three option are – a full conversion of warrant at Rs 175 face value, convertible into one equity share of Rs 1/-, partial conversion and non-conversion at the end of 18 month tenure.
UBS Warbug is the advisor to the deal. AOL Time Warner will initially be only providing content to Zee Networks under this arrangement. AOL Time Warner also have the option of enhancing its stake to 26% if all goes well.