Mumbai: The promoters of Zee Entertainment Enterprises (ZEE) will sell an 11% stake in the media company to US-based financial investor Invesco Oppenheimer Developing Markets Fund for a consideration of Rs 4,224 crore. The move, spurning an offer by a Comcast-led group, follows a nine-month search for a buyer as the parent Essel Group seeks to reduce debt by selling assets. The promoters are confident of selling a further 9% stake in ZEE by the September 30 deadline for debt repayments.The fund, which is registered with the US Securities & Exchange Commission, has been a financial investor in ZEE since 2002 and currently owns a 7.7% stake in the company.ET reported July 31 that the ZEE promoters were leaning toward the binding offer from a financial investor. The other offer, a nonbinding one, had come from a consortium led by US cable major Comcast that also included James Murdoch’s Lupa Systems, private equity fund Blackstone and independent fund Atairos.“We have reached an agreement to sell up to 11% equity for a consideration of Rs 4,224 crore in ZEE, based on how many shares we are able to deliver to them,” said Punit Goenka, managing director and chief executive of ZEE. “It’s a straightforward transaction of pure shares that they will buy from the promoter family.”Justin Leverenz, portfolio manager at Invesco Oppenheimer Developing Markets Fund, said, “The Fund in its usual business practice has been investing in the Indian markets for many years and has been a financial investor in ZEE for 17 years. This additional financial investment underscores our continued confidence in management’s ability to deliver long-term growth and financial returns. The sound fundamentals of ZEE make this a highly compelling transaction for investors in the fund.”The promoters will now take the offer to the lenders. “The shares are with the lenders and I will now ask them to place those shares in the escrow. Once the escrow agent confirms the share transfer, Oppenheimer will remit the money,” Goenka said, elaborating on the next course of action.The stake sale is part of the ongoing deleveraging process by the Essel Group, which owns ZEE, to repay lenders by September end. The proceeds will mostly go toward paying for debt raised from mutual funds at the promoter level, rather than the banks, which have exposure to the Essel Group’s infrastructure unit. ET reported earlier that along with ZEE, Essel Group is also in the process of divesting some of its non-media assets, including the solar energy and roads portfolios.“Through the sale of non-media assets, this deal and some more sale we should be comfortable to pay off the entire debt,” Goenka said. “We started out with the intention of selling 20% stake in ZEE and 9% is still on the table. There are people who are approaching us and engaging with us. Now the floor price is set. I am confident of selling that too and repaying all the lenders by September 30.”On favouring a financial investor over the consortium, Goenka said that the offer from the latter, which came in late Monday night, was a nonbinding one. “It was not matching to the timeline. We have to repay lenders by September 30 and the process wouldn’t have completed by then,” he said.ET reported February 19 on Comcast and Atairos teaming up with Lupa Systems and Blackstone for Subhash Chandra’s flagship company. It was then reported that the consortium was bidding for a 21-25% stake, with the option of holding a subsequent open offer.Goenka declined to give details of the offer by the Comcast-led consortium but said it didn’t involve a total buyout.Ajay Bodke, CEO and Chief Portfolio Manager at stock broking firm Prabhudas Lilladher, said that this is an encouraging beginning but the group needs to expedite the sale of other non-media assets to deleverage substantially.“It is a welcome start by the promoters who have been steadfastly assuring all the lenders since the last six months that they will repay their entire liabilities. They will need to expedite sale of other assets like roads, solar, finance, mutual funds etc as indicated previously by September 2019 and have indicated that they are in advanced stage of negotiations for the same,” he said.Chandra, chairman and founder of the Essel Group, had initially said in November last year that he intended to sell half of the promoters’ then 41% stake in ZEE to a strategic partner. Essel had also appointed Goldman Sachs Securities as investment banker and US and Europe-based LionTree as an international strategic advisor for this exercise.However, ZEE’s shares fell 26% on January 25, marking its largest single-day drop after media reports alleging links between the group and Nityank Infrapower and Multiventures, a company that is under the scrutiny of investigative authorities for deposits of over Rs 3,000 crore during or after demonetisation. The Essel Group and ZEE denied any link with Nityank.Later, the promoters reached an agreement with lenders, including mutual funds, which allowed them to repay loans by September 30. The debt-laden Essel Group is planning to generate Rs 20,000 crore by selling its infrastructure business, including roads, power transmission and solar energy assets to trim company’s and promoters’ debt.Chandra had told ET earlier that he’s confident of meeting the September 30 deadline. “Our core objective is to come out clean from this by repaying everyone’s money and that too happily,” he had said.The proceeds of the ZEE stake sale will mostly go to mutual funds.