Zee to split into four in major restructuring

Our Corporate Bureau
31 March 2006

Zee Telefilms has announced a significant business restructuring plan to create more focused entities and bring more transparency to the holding structure. The company's board, which met yesterday, has cleared a 4-way split of the various businesses - subject to regulatory and shareholder approval.

Under the proposed de-merger plan, news channels like Zee News and Zee Business and regional language channels like Zee Marathi, Zee Punjabi and Zee Bangla would be de-merged into Zee News Limited. Shareholders of Zee Tele would receive 137 equity shares of Zee News for every 100 equity shares held.

The cable television distribution business of Zee Tele and its 100 per cent subsidiary Siti Cable Network Limited would be transferred to a company called Wire & Wireless India Limited. Zee Tele shareholders would receive one equity share of Wire & Wireless for every two equity shares held. Wire & Wireless would also allot preference shares to Zee Tele, not to Zee Tele shareholders, in lieu of the equity stake held in subsidiary company Siti Cable Network.

The direct-to-home (DTH) business of Zee would be consolidated under the company ASC Enterprises Limited, which holds the DTH license. The services are currently being marketed by Zee and subsidiaries of Siti Cable. These operations would be de-merged from the respective companies and consolidated into ASC Enterprises. The de-merger ratio for this company has not been announced.

All the three de-merged companies, Zee News, Wire & Wireless and ASC Enterprises would be listed on the stock exchanges after the completion of the de-merger process.

Zee Tele would retain the entertainment channels like Zee, Zee Cinema, Zee Café, etc, emerging as a much more focused business. The company's entertainment bouquet is the second most popular in the country.