Makeover mood

Mumbai, Feb. 8: The Rs 1,300-crore Zee Telefilms is gearing up for a three-way demerger whereby the company will hive off its broadcasting, content and cable operations as separate entities.

Market sources said the company will hold a board meeting on February 13 to consider the proposed restructuring. The restructuring is expected to unlock value for the company's shareholders and will also enable Zee Telefilms to have a sharper focus on each of these operations.

Speculation is also rife that Zee may bring in a strategic partner for its cable operations, which now come under the banner of Siticable. Siticable Networks Limited is a wholly owned subsidiary of Zee Telefilms.

Zee has got ambitious plans for Siticable and is looking forward to reinvention of this business to boost revenues.

Siticable will pursue new technology businesses with renewed focus, including cable digitisation, broadband and similar initiatives.

The hive-off of the content operations will enable the company to create programmes for other broadcasters, thus yielding an alternate revenue stream.

However, when contacted, the company officials said they were not aware of any board meeting and declined to comment on the issue.

According to the third quarter results of Zee Telefilms, the content and broadcasting segments contributed 81.3 per cent of the total quarter revenue of the company. The access segment, which includes Siticable, Zee Turner and distribution segment of ZTL contributed 20.9 per cent of the total quarter revenue. The film production and distribution segment and the education division made negligible contribution.

Zee Telefilms recorded a 17.1 per cent increase in its consolidated revenues for the third quarter of the current fiscal at Rs 377 crore against Rs 323 crore for the same period last fiscal. Advertising sales and subscription revenues contributed 44.9 per cent and 46.4 per cent of the total revenues for the quarter respectively.

Zee Telefilms Limited, promoted by Subhash Chandra, was founded in October 1992 as a content supplier for Zee TV ? India's first Hindi satellite channel.

The company has since transformed itself into an integrated media conglomerate with operations spanning the entire media spectrum, including television programming, satellite broadcasting, cable distribution, production and distribution of films, music publishing, long distance education and the creation of animation software.