In a move to consolidate its media and distribution business spread across multiple entities and reduce the number of listed entities, Reliance Industries Limited (RIL) has announced Scheme of Arrangement (Scheme) whereby, TV18 Broadcast Limited, Hathway Cable & Datacom Limited and Den Network Limited will get merged (Amalgamation) into Network18 Media & Investment Limited.
Further, immediately after the Amalgamation, as a part of the same Scheme, the cable business undertaking, the ISP Business Undertaking and the Digital Business Undertaking of the amalgamated Network18 Media & Investment Limited will be transferred to the Wholly-Owned Subsidiaries (“WoS”) of the Network18 Media & Investment Limited.
Network18 Media & Investments Limited (Network18) has presence in several media and entertainment businesses directly and through its subsidiaries like general news channels in Hindi, English and other regional languages, business news channels in Hindi, English and Gujarati, general entertainment channels in Hindi, English and other regional languages, factual entertainment channels, business of printing and publishing magazines, digital business, content creation and production business. The equity shares of the company are listed on the BSE and the NSE.
Den Networks Limited (Den) is engaged in the business of (i) providing cable television services as multisystem operators; and (ii) broadband services through wholly-owned subsidiary. The equity shares of Den are listed on the BSE and the NSE.
Hathway Cable and Datacom Limited (Hathway) is in the business of (i) wired broadband services; (ii) cable television services through its subsidiaries and joint ventures; and (iii) distribution of over the top services. The equity shares of Hathway are listed on the BSE and the NSE.
TV18 Broadcast Limited (TV18) is engaged in the media business and it broadcasts general news channels in Hindi, English and other regional languages and business news channels in Hindi, English and Gujarati and also broadcasts, through its subsidiaries, general entertainment channels in Hindi, English and other regional languages as well as factual entertainment channels. The equity shares of TV 18 are listed on the BSE and the NSE.
Media18 Distribution Limited (Media18) is a wholly-owned subsidiary of Network18 and has been incorporated to carry on the business of setting up, acquiring, holding/investing in and/or promoting various ventures inter alia relating to cable television services encompassing distribution, relaying and transmission of signals.
Web18 Digital Services Limited (Web18) is a wholly-owned subsidiary of Network18 and has been incorporated to carry on the business of setting up, acquiring, holding/investing in and promoting various ventures inter alia relating to the business of operating internet services, broadband services, ISDN services, leased line services and VSAT services.
Digital18 Media Limited (Digital18) is a wholly-owned subsidiary of Network18 Media & Investments Limited and has been incorporated to carry on business of setting up, acquiring, holding/investing in and /or promoting various ventures inter alia relating to the business of broadcasting, telecasting, relaying, transmitting or distributing digitally or in any other manner, any audio, video or other programmes or software.
All three Media18, Web18 and Digital18 are newly established companies incorporated mainly for the execution of the transaction.
Current Structure
Previous Transaction
Acquisition of Network18
In one of the biggest ever deal in the Indian media sector, In 2014, Reliance Industries Ltd (RIL) acquired control in Network 18 Media & Investments Ltd, including its subsidiary TV18 Broadcast Ltd, for circa INR 4,000 crore.
For RIL, the takeover was a strategic move for its 4G telecom play in the country. The acquisition gave RIL access to all the content put out by Network18 group including in.com, IBNlive.com, Moneycontrol.com , Firstpost.com, bookmyshow.com and broadcast channels like Colors, CNBC, CNN-IBN etc.
Acquisition of Hathway
To expand cable & broadband sector, in 2018, Reliance Industries Limited made two strategic investments in Den & Hathway by acquiring the major stake in both the companies.
Current Transaction
After streamlining both acquisitions, RIL has now decided to consolidate its cable & broadband business through Scheme of Arrangement.
The Scheme inter alia provides for amalgamation of Den, Hathway and TV18 into Network18 and immediately later transfer of the cable, broadband/ISP and digital businesses in 3 (three) separate wholly-owned subsidiaries of the Company, namely Media18, Web18 and Digital18, respectively (“Business Transfers”) through Slump exchange. The consideration for Slump Exchange will be equal to the book value of the “Undertaking”.
As a result, all the cable business, ISP business and digital business will get merged with Network18. Immediately after the merger, Network18 will transfer the respective business to its wholly-owned subsidiaries through “Slump Exchange” for a consideration equal to the net worth of the respective businesses and thereby retaining 100% control over the respective businesses.
The consideration for business transfer shall be discharged by each of Media18, Web18 and Digital18 by issue of securities to the company.
After the transaction, the group structure will look like:
continue to read… Powerhouse in the making: RIL merges media content and distribution with Network18
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