MUMBAI: Global proxy advisory firm Glass Lewis has thrown its weight behind Zee Entertainment’s plan to issue up to 169.5 million convertible warrants to its promoter group, giving the broadcaster a crucial endorsement ahead of its 10 July EGM. The deal, priced at Rs132 per warrant, could fetch Zee a much-needed Rs2,237 crore war chest.

The preferential allotment—to Sunbright Mauritius Investments and Altilis Technologies, both part of Zee’s promoter stable—will see a 25 per cent upfront payment, with the balance due within 18 months. The warrants convert into equity on a 1:1 basis and would dilute existing share capital by about 15 per cent, which Glass Lewis termed “reasonable.”

The firm said the proposal clears Sebi’s rulebook on pricing and fairness and raised no governance red flags. Zee says the funds will back strategic expansion, bolster liquidity in an increasingly brutal media market, and fund acquisitions in high-growth niches.

Despite lacklustre stock performance—down 28.4 per cent over the past year and 29.7 per cent over three—Zee has retained a solid ESG profile. Sustainalytics rates its ESG risk as low, while ESG Book places it in the 90th percentile for governance among broadcasters.

But the proxy adviser flagged one weak link: cybersecurity. BitSight ranks Zee in the bottom five per cent of the entertainment sector. Although the firm has had no major data breaches in 18 months, its digital ramp-up puts it at risk, Glass Lewis warned.

Public shareholders hold more than 95 per cent of Zee’s equity. Big names include Sprucegrove (5 per cent), LIC (4.63 per cent), and Norges Bank (3.95 per cent), with support from mutual funds and institutions likely to be decisive.

The EGM will be held virtually, and the record date was 3 July. If passed, the resolution would help Zee reset its balance sheet and fire up its strategic ambitions in streaming and beyond.