: Network18 to Raise Funds, Buy Eenadu Assets : MUMBAI : Indian media firm Network18 is expected Tuesday to announce a fundraising plan and the purchase of assets of Eenadu, a regional media company, according to a person familiar with the matter. Network18 is eyeing all of Eenadu’s news assets and part of its entertainment assets, this person said, though further details were not available.
The announcement is expected following a Network18 board meeting Tuesday afternoon, this person said. The fundraising plan is aimed at beginning to reduce the group’s debt and to finance the acquisition. The fundraising will rely partly on the stock market. Network 18 includes partnerships that run India’s versions of CNBC, MTV, Nickelodeon, CNN, a top-rated Hindi entertainment channel, and some of the country’s largest e-commerce sites.
The Wall Street Journal had reported in December that Mukesh Ambani, India’s richest man and chairman of Indian energy and petrochemicals giant Reliance Industries Ltd., has been in deal talks with Network18 founder and controlling shareholder Raghav Bahl. Mr. Ambani has a financial interest in Eenadu, according to people familiar with the matter.
The deal with Eenadu would give Network 18 access to a huge regional market. A Reliance company spokesman declined to comment. Neither Eenadu nor Network 18 could be reached for comment. Network18 has scheduled a press conference for Tuesday afternoon. Network18 Media and Investments Ltd. – the holding company for the conglomerate – had annual revenue of about $274 million but suffered a net loss of $6.8 million in the year ended March 31.
For Network18, an injection of funding would be a major financial boost at a time when the conglomerate is trying to reduce a heavy debt load. The company borrowed to fund its aggressive expansion in the past several years, including the launch of a 50-50 joint venture with Viacom and its initial investments in new media such as the Web portal In.com. In addition to the talks with Mr. Ambani, Network18 has been exploring ways to sell off non-core assets to raise cash such as its stake in travel Web site Yatra.com, the Journal reported last month.
India has seen a boom in all forms of media in the past decade, as entrepreneurs have sought to cater to the huge demand for entertainment and news. With 130 million TV households, India is one of the largest TV markets in the world and still has a lot of runway for growth with only 61% penetration, according to a recent report by PricewaterhouseCoopers.
Television accounts for roughly half of all media revenues in India and is expected to grow from $6.8 billion in revenues in 2010 to $13.4 billion in 2015, the PWC report said. Network18 launched in 1999 and started out in financial news with CNBC-TV18, which commands 56% of viewership among business channels. The firm later expanded into general news through the joint venture CNN-IBN, which is also a top-rated channel. The 2007 joint venture with Viacom – dubbed Viacom18 – was a major bet that international entertainment content would appeal to India’s emerging TV audience.
The Wall Streel Journal में प्रकाशित Megha Bahree and Paul Beckett की रिपोर्ट.
