Eighteen India Ltd has announced that TV 18 has finalised
the scheme for consolidating its media businesses, the
preliminary details of which were approved by the company's
board of directors on October 12, 2005. The scheme creates
a Group structure that is expected to unlock significant
shareholder value. Hitherto, the Hindi consumer channel
of the Group, CNBC Awaaz, and the general news
English Channel, CNN-IBN, were held in promoter entities
and were legally not a part of the listed company, owing
to government restrictions.
new scheme envisages consolidation of the business news
operations (including Awaaz and CNBC-TV18) in TV18,
whereas Network 18 India Holdings Ltd (the proposed name
of the listed holding company) would hold majority stakes
in TV18 and in the channel CNN-IBN. TV18 would also hold
a portfolio investment stake in CNN-IBN, whose value could
be realised at an opportune time. The restructuring would
enable the group to comply with the uplinking guidelines
of the government.
of the High Court, the revised structure would leave TV-18
with a share capital of 52.41 million shares each of a
face value of Rs5, while Network-18 would have a share
capital of 50 million shares also of a face value of Rs5
each. Post implementation of the restructuring, Network
18 will approach the markets with a public offering, to
raise money for further growth as well as facilitate efficient
India Pvt Ltd provided valuation guidance for the scheme
of restructuring, while BMR & Associates acted as
transaction and financial advisors.
on the share swaps recommended, an existing shareholder
of TV-18 holding 10 shares of a face value Rs10 each would
end up with 12 shares of face value Rs5 each in Network
Ltd and 14 shares of face value Rs5 each in TV18.
group will now approach stock exchanges for mandatory
clearances, and then apply to the Delhi High Court for
sanction of the scheme.