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Mukesh Ambani breaks Rs 4000cr news

Mumbai, May 29: Mukesh Ambani is ready to morph into a media mogul.

Reliance Industries Ltd (RIL) is finally taking control of the television media empire spawned by journalist-turned-entrepreneur Raghav Behl, formalising an association that began just over two years ago when the country’s largest private conglomerate bankrolled Network18’s buyout of Eenadu TV’s suite of regional news channels.

In a statement issued today, RIL — the country’s largest private company with a turnover of over Rs 4 lakh crore in 2013-14 — said it was shovelling Rs 4,000 crore into Independent Media Trust (IMT) to acquire control of Network18 Media and Investments Ltd (NW18), including its subsidiary TV18 Broadcast Ltd.

RIL is the sole beneficiary of Independent Media Trust (IMT), which was formed to consolidate the group’s media interests. Ambani’s overall investments in the segment are eventually expected to touch Rs 10,000 crore.

The statement said IMT would acquire about 78 per cent in Network18 and 9 per cent in TV18 Broadcast Ltd.

The Mukesh Ambani flagship said it would come out with open offers for the two listed companies.

“By taking control of Network18 and TV18, Mukesh Ambani will now become a media mogul,” said an analyst.

Network18 is the owner of a suite of premier digital Internet properties, e-commerce businesses and differentiated broadcast content. Its web content properties include moneycontrol.com, ibnlive.com, in.com, firstpost.com and cricketnext.in.

The e-commerce websites are HomeShop18 and bookmyshow.com. It also publishes special interest magazines like Overdrive, Intelligent Computing Chip and Forbes India.

TV18 is a listed subsidiary of Network18 and operates business news and general news channels like CNBC-TV18, CNN-IBN and IBN7.

Separately, TV18 has a joint venture with Viacom International Inc of the US, called Viacom18 Media Private Ltd, which operates entertainment channels like Colors, MTV, VH1, Nick, Sonic and Comedy Central.

Reports suggested Behl was likely to resign tomorrow. Earlier this week, three top officials at Network18 — chief executive officer B. Sai Kumar, chief operating officer Ajay Chacko and chief financial officer R.D.S. Bawa — had resigned.

Rajdeep Sardesai and wife Sagarika Ghose, who own minority stakes in CNN-IBN, are expected to sell their shares to RIL.

Late tonight, RIL came out with details of how it intended to acquire stakes in Network18, TV18 Broadcast and Infomedia18.

The Ambani flagship will be paying Rs 3,266.78 crore to acquire a 71.25 per cent stake in Network18, including a cash payout of Rs 705.96 crore to Behl and Ritu Kapur and loans of Rs 348.02 crore to pay off debts.

RIL also announced an open offer price of Rs 41.04 per Network18 share to acquire 21.96 per cent shares from the public for which it has earmarked a sum of Rs 943.70 crore. It came out with an open offer price of Rs 30.18 per TV18 Broadcast share, intending to acquire a 26 per cent stake, for which it has kept aside a sum of Rs 1,347.57 crore.

It will acquire an indirect 55 per cent stake in TV18 Broadcast under a share purchase agreement with Behl and his associates.

The buyout of the television companies will enable Reliance Jio, Ambani’s telecom company, to offer digital content from the news and entertainment channels on its soon-to-be-launched 4G broadband network.

In January 2012, Reliance Industries had forged a complicated deal with Behl under which TV 18 acquired Equator Trading Enterprise Pvt Ltd, an Ambani-controlled entity, which held stakes in ETV’s regional news channels through three separate group firms.

Reliance also provided Rs 1,700 crore to cash-strapped Behl that he used to subscribe to rights issues floated by his two companies — Network18 and TV18 Broadcast.

At the same time, RIL subscribed to the zero-coupon optionally convertible debentures floated by Network18 and TV18 to raise a combined sum of Rs 5400 crore.

Under the terms of the deal, the holder of the debentures had the option to convert them into equity shares within 10 years from the day that they were subscribed.

Behl used the proceeds from the rights issues to finance a reverse merger that folded ETV news channels into TV18.

He acquired RIL-owned Panorama Television which held 100 per cent stakes in ETV Rajasthan, ETV Bihar, ETV Madhya Pradesh, ETV Uttar Pradesh and ETV Urdu.

He also bought a 50 per cent stake in Prism TV Private Ltd another Ambani entity that owned mirror shareholdings in ETV Marathi, ETV Bangla, ETV Gujarati, ETV Kannada and ETV Oriya.

Behl also acquired 24.5 per cent stake in Eenadu Television Pvt Ltd which ran ETV Telugu and ETV-2 channels.