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Essel to raise US$500 million to fund the growth of its companies

The Essel Group seeks to raise US$500 million to fund its expansion plans and pay off the debts of some of its group companies. It may use the funds of the DTH service provider Dish TV India Ltd., MSO Siti Cable Network Ltd. and the school operator Zee Learn Ltd. Siti Cable Network Ltd., formerly Wire and Wireless (India) Ltd., is raising INR3.24 billion from its promoter to pay off its debt and fund its digitization initiative. The funds will also be used to acquire Multi System Operators (MSOs) and local cable operators (LCOs).1

FDI in DTH and digital cable upped to 74%

The Government has raised the FDI ceiling on DTH and MSOs to 74% from 49%. It has also lifted the cap on the FDI limit for teleports and hubs set up to up-link TV channels to 74%. It has, however, left untouched FM radio and TV news channels, where the cap is 26%. Furthermore, the Government has decided that FDI in mobile TV, for which there was no specific dispensation, will be permitted up to 74%. FDI of up to 49% in all these services will be under the automatic route. Stakes beyond that will require the approval of the Foreign Investment Promotion Board (FIPB).2

Walt Disney gets nod from FIPB to invest INR10 billion

Walt Disney Company Southeast Asia Pte Ltd. plans to invest INR10 billion (as foreign equity) in Walt Disney’s India operations to expand the business. It also seeks to make downstream investments in other companies and subsidiaries, including those engaged in the broadcasting segment.3

Network18 Group companies planning rights issues

Network18 Media & Investments Ltd. (Network18) and TV18 Broadcast Ltd. (TV18), which are part of the Network18 Group, propose to come out with rights issues to cumulatively raise close to INR54 billion. The companies have priced their rights issues (including premiums) close to the current market prices of the shares. The equity base of both the companies is expected to rise after these are issued due to the huge sizes of their offers, which will put pressure on their value appreciation.4

STAR ready to sell its 26% Balaji stake to promoters

STAR India is open to selling its 25.9% stake in Balaji Telefilms to its promoters. The company currently has market capitalization of INR2.62 billion. It was not involved in managing the company and was only a passive investor. STAR had acquired a 21% stake in Balaji Telefilms in 2004 through its Dubai-based affiliate Asian Broadcasting FZ-Llc from its promoters for INR1.23 billion. It later opted for an open offer and increased its stake to 25.9%.5

Zee News Ltd. to close down Telugu news channel

Zee News Ltd. has decided to close down its Telugu news channel, Zee 24 Gantalu, from 20 September 2012. Its operational losses, due to stiff competition among the overcrowded Telugu news channels, have compelled its management to take this decision. There are 14 Telugu news channels operating in the market, with two more slated to be launched. Zee had received an offer from a political family in Andhra Pradesh, who wanted to acquire close to 70% equity in the channel, with Zee holding the rest. 6

PE fund New Silk Route firms up plans to exit 9X Media

PE player New Silk Route (NSR) Advisors is planning to exit 9X Media. NSR had entered the business in 2007 and upped its stake in 2009 when Peter Mukherjea, who had launched 9X Media, left the company. 9X Media is run by a consortium of investors, with NSR being the majority shareholder.7

HITS platform to be available in India

Noida Software Technology Park (NSTPL) is set to launch Jainhits, a TV distribution company using the HITS technology. This technology is supposed to be relatively less expensive than existing digital cable or DTH platforms. It is reported that Jainhits will invest around INR2.5 billion during the first two phases of the launch and offer set top boxes (STBs) to customers at INR950. The company expects to sell three million STBs in the initial phase after its launch in November 2012. Furthermore, it plans to mobilize around INR15 billion over a period of five years.8

Airtel plans VOD service for its DTH customers

Bharti Airtel is planning to launch its new Progressive Download (PDL) service. This will comprise two services — video-on-demand and Catch-up TV. A PDL customer will need to be an existing Airtel DTH and broadband customer, and will be able to view any program on Catch-up TV from already available channels as long as these are covered by their DTH subscription.9

TRAI amends draft advertisement guidelines 

TheTelecom Regulatory Authority of India (TRAI) has amended its regulations on Standards of Quality of Service (duration of advertisements in TV channels), which were expected to provide guidelines on advertisements aired on TV channels. TRAI has made two key changes in the regulation — it has cancelled the regulation relating to the minimum gap between two consecutive ad breaks and has allowed unutilized ad minutes to be carried forward to the next hour.10

NDTV undergoes internal restructuring process

NDTV is undergoing an internal restructuring process, with the management laying off around 50 employees out of its 1,800-strong workforce across India. It has taken this step to improve efficiencies in the channel. It is reported that employees across departments, including journalists, have been asked to leave.11


1“Essel plans to raise US$500 million to fund growth of its companies,” Indiantelevision, 11 September 2012, via Factiva; “WWIL to raise INR3.24 billion via warrants to promoter firms,” Indiantelevision, 8 September 2012, via Factiva

2“FDI in DTH and digital cable upped to 74%,” Indiantelevision, 14 September 2012, via Factiva

3“Walt Disney gets FIPB nod to invest INR10 billion,” Livemint, 23 August 2012, via Factiva

4“Network18 Group companies plan mega rights issues,” Business Line, 2 September 2012, via Factiva

5“STAR ready to sell 26% Balaji stake to promoters,” afaqs!, 5 September 2012, via Factiva, © 2012 Banyan Netfaqs Pvt. Ltd.

6“Zee News Ltd to shut Telugu news channel,” Indiantelevision, 28 August 2012, via Factiva; “AP minister's family may take over Zee Telugu news channel,” Business Standard, 12 September 2012, via Factiva.

7“PE fund New Silk Route firms up plans to exit from 9X Media,” Best Media Info, 17 August 2012, via Factiva.

8“HITS platform to be available in India, again,” afaqs!, 30 August 2012, via Factiva, © 2012 Banyan Netfaqs Pvt. Ltd.

9“Airtel plans VOD service for DTH customers,” Business Line, 28 August 2012, via Factiva.

10“TRAI amends draft advertisement guidelines,” Exchange4media, 29 August 2012, via Factiva, © 2012 Adsert Web Solutions Pvt. Ltd.

11“NDTV undergoes an internal restructuring process,” Business Standard, 13 September 2012, via Factiva.

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