INSUBCONTINENT EXCLUSIVE:
Media tycoon Subhash Chandra scrambled over the weekend to stem a crisis that wiped $1.6 billion off his flagship Zee Entertainment
Enterprises Ltd.'s market value on Friday and threatened to derail his plans to sell a stake in the company.Shares of India's biggest
television network and group company Dish TV India Ltd
plunged more than 25 percent in the last two hours of trading after news website The Wire published a report alleging that companies linked
to Chandra were involved in fraud and money laundering
The group released statements on Friday and Sunday denying the allegation.On Friday, Zee's Chief Executive Officer Punit Goenka told
investors on a call that the share plunge won't hit Chandra's plans to sell half of his stake in Zee
Chandra, 68, later that evening issued an open letter blaming poor investments in the infrastructure sector combined with its exposure to
the failed lender Infrastructure Leasing Financial Services Ltd
for the group's rising debt and apologized to his investors and creditors for the conglomerate's financial woes.Chandra, who started Zee
in 1992, is seeking a strategic investor to help him fend off competition from Netflix Inc., Amazon.com Inc
and hundreds of local TV channels vying to tap India's booming demand for content
Plunging shares may hinder those plans and his attempts at reducing debt
billion)."There's no change to business fundamentals," Kapil Singh and Siddhartha Bera, analysts at Nomura Holdings Inc
in Mumbai wrote in a report Saturday
Zee trades at a "very attractive" valuation, they said, maintaining their buy recommendation on the stock.Zee is close to selling an
infrastructure asset and expects to complete the sale of road and solar power projects by April, Goenka said
Zee's owners have pledged 59 percent of their shares to lenders as collateral, and the asset sales may help them revoke the
pledges.Friday's slump may have "exacerbated risk of pledges being invoked," CLSA analysts Deepti Chaturvedi and Akshat Agarwal wrote,
while also recommending clients buy the shares.Zee on Thursday reported a 75 percent jump in profit to Rs 560 crore on sales of Rs 2,170
crore for the December quarter.Chandra, a former rice trader, in his letter urged lenders to "maintain patience, till the process of Zee
Entertainment's stake sale is completed." "Post the sale process, we will be positively able to repay the entire dues, but if the lenders
react in a panic situation, it will only hurt them and us."
