TV 18 plans Rs510-crore rights issue to repay debt
13 May 2009
Television Eighteen India, the company that operates the leading business news channel CNBC TV18, on Wednesday said that it would raise Rs510 crore from its existing shareholders through a rights issue, which it will use to re-pay its debt.
The promoters along with group entities have committed to subscribe to the unsubscribed potion of the issue in case it does not get a sufficient response. The company would finalise the price per equity share for the issue and other details before the date of the opening of the issue,it said in the statement to Bombay Stock Exchange (BSE).
"The Board of Television Eighteen India has approved a rights issue of Rs 510 crore. The cash raised in this issue will primarily be used to re-pay debt," the company said in a filing to the Bombay Stock Exchange.
A straight equity instrument is proposed to be offered in this rights issue. Other terms, including record date, entitlement ratio and price per equity share, will be finalised closer to the date of the opening of the issue, the company added. ICICI Securities has been appointed as the lead manager to the issue, it added.
Shares of the company surged on the Bombay Stock Exchange after the announcement.
Currently, TV18 has Rs600 crore of net debt and Rs1100 crore as gross debt on its balance sheet. Raghav Bahl, managing director of Network 18, said,'' We want to be a zero-debt company after the rights issue, post which we will look at growth options. Our focus is on deleveraging the TV18 balance sheet.''
The rights issue will be done between 4-5 months from now and Network 18 will be the principle underwriter.
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