ZEEL to acquire Anil Ambani’s TV biz; Zee Media to pick up 49% of FM radio
ZEEL to acquire Anil Ambani’s TV biz; Zee Media to pick up 49% of FM radio
Subhash Chandra-promoted Zee Entertainment Enterprises Limited (ZEEL) is set to acquire of the General Entertainment Broadcasting Business Undertaking of Reliance Big Broadcasting , Big Magic Limited and Azalia Broadcast Private Limited, all part of Anil Ambani led Reliance Group Entities through a scheme of demerger and execution of definitive agreements in relation to such proposed acquisition. In a separate transaction, Anil Ambani’s radio outfit is diluting 49% stake to Chandra’s other company, Zee Media Corporation Ltd (ZMCL).
Reliance Broadcast’s FM radio network Big FM will offload 49% to ZMCL. ZEEL and RBNL transaction The TV Broadcasting business of Reliance Group Entities currently comprises two operational general entertainment channels (BIG Magic and BIG Ganga) and 4 other TV licenses. BIG Magic is a Comedy channel catering to Hindi Speaking Markets. BIG Ganga is a leading Bhojpuri entertainment channel catering to audiences in Bihar, Jharkhand and Purvanchal. The channels are available on all major MSOs and DTH operators. The general entertainment TV broadcasting business undertaking along with its assets, liabilities, licenses, trademarks will get demerged from “BIG Magic Ltd”, “Reliance Big Broadcasting Private Ltd” and “Azalia Broadcast Private Ltd” into ZEEL through a court- approved scheme. Punit GoenkaZEEL MD and CEO Punit Goenka said, “We are pleased to announce this acquisition which further adds to our expanding universe of general entertainment channels.
BIG Magic gives us access to comedy genre enhancing our customer offerings. BIG Ganga, a leading Bhojpuri channel syncs with our strategy of expanding into the regional markets which offers attractive growth potential. I am confident that these two channels will make the ZEE Network channels more enriching for the audience and for the Company.” Sam GhoshReliance Capital ED and Group CEO Sam Ghosh said, “We are happy to divest 100 per cent of our general entertainment TV business to Zee Entertainment. This transaction is part of our strategy to reduce exposure in non-core businesses and work towards further reducing debt under Reliance Capital.” The proposed transaction remains subject to approval of the shareholders and requisite regulatory approvals including stock exchanges, Ministry of Information & Broadcasting, and Bombay High Court. The transaction is expected to close in the second half of CY2017. ZMCL and RBNL transaction The radio broadcasting business of Reliance Group is being operated in RBNL, which runs the largest network of FM radio channels in India – 45 operational licenses (issued under Phase II and migrated to Phase III) and 14 new licenses (issued under Phase III).
The FM channels are being broadcast under the brand “92.7 BIG FM”, reaching to 45 cities, 1200 towns and over 200 million people. It reaches out to around 43 million listeners per week and engages with a large number of national and local advertisers. RBNL will be transferring the 45 operational and 14 new licenses into two special purpose vehicles (SPVs) respectively along with the assets and liabilities. ZMCL will acquire 49% stake in each of these two SPVs. ZMCL and RBNL will also have a call/put option to acquire/sell the balance 51% after the lock-in provisions on the permission holder of these licenses expire. As per MIB regulations, atleast 51% shareholding needs to be held by the permission holder for a minimum period of 3 years from the date the channels were operationalised. The lock-in period for the 45 operational licenses shall expire on 31st March 2018, whilst the lock-in period for the 14 licenses shall expire after the expiry of 3 years from the day all 14 licenses shall have become operational, which is expected to be around March 2020. ZMCL COO Rajiv Singh said, “We are pleased to announce this acquisition which shall not only be complementary to our current business but accelerate its growth too. We are currently running successfully a bouquet of 11 news and current affair channels and with the addition of 59 radio licenses, we will be reaching out to a much increased audience base and will keep them engaged on different media platforms. This acquisition shall bring about the desired business diversity and will help in achieving the sound financial objectives at an accelerated pace. We are confident that this investment will enhance value for all stakeholders and looking forward towards this exciting journey to take the company to the next level.” Sam Ghosh added, “We are happy to bring in Zee Media as our partner in the Radio business. This transaction is part of our strategy to reduce exposure in non-core businesses and work towards further reducing debt under Reliance Capital.”
The proposed transaction remains subject to regulatory approvals including Ministry of Information & Broadcasting. The transaction is expected to close in the first half of CY2017. Acquisory Consulting LLP and KPMG are acting as financial / tax advisors to ZEEL and ZMCL. Luthra & Luthra Law Offices is acting as the legal advisor. EY and Phoenix Legal are acting as financial and legal advisors to Reliance Broadcast Network Limited respectively.
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