Essel Group company Zee Entertainment Enterprises Ltd (ZEEL) on Monday said it will undertake a share buyback programme that will entail an outgo of up to Rs 700 crore. 

In a filing to the Bombay Stock Exchange, the company said buyback of its fully paid-up equity shares of Re 1 face value each will be at a price not exceeding Rs 126 per equity share. 

The company proposes to buyback a minimum of 1.26 crore equity shares from existing shareholders other than the promoters, it said. 

"The maximum buyback size is within 25 per cent of the aggregate of the company's paid-up equity capital and free reserves as on March 31, 2010," the filing added. 

The actual number of equity shares to be bought back would depend upon the average price paid for the equity shares bought back and the amount deployed in the buyback in accordance with the resolution passed by the board of directors on February 11, 2011, it said. 

The buyback offer will open on July 27, 2011, and close on March 23, 2012. "Last date for the buyback is March 23, 2012, or when the company completes the buyback to the extent of Rs 700 crore, whichever is earlier," it said. 

The closing date could also be earlier, as may be determined by the board, in the event the minimum offer shares have been purchased under the buyback, even if the maximum buyback size has not been reached, the filing added. The company's shareholders had approved the buyback through a postal ballot on March 25, 2011. 

Enam Securities Pvt Ltd is managing the offer on behalf of ZEEL. The company did not specify the purpose of the buyback in the filing. 

ZEEL's scrip was being quoted at Rs 122.85 in afternoon trade on the BSE , down 0.57 per cent compared to the previous close.( ET )