| Chandra: Fast forward
Mumbai, Dec. 8: The restructuring of Subhash Chandra's media empire took another step forward when the boards of his flagship company Zee Telefilms and ETC Networks said they will meet to discuss the consolidation of the businesses.
The Zee share gained marginally on the bourses. The scrips opened at Rs 130, from its Friday closing of Rs 129.60 and closed at Rs 131.25 today.
The ETC Networks share opened at Rs 54.45 and closed at Rs 57.35.
The meetings are scheduled for December 15. Company officials when contacted declined to elaborate further on the plans concerning the restructuring scheme. However, media analysts said the move would be to merge ETC Network with Zee Telefilms.
The Essel group had earlier undertaken a major restructuring exercise that saw the closure of 11 subsidiaries within its fold, bringing down the number of subsidiaries from 23 to 12.
Last year, while explaining the restructuring Zee Telefilms chairman Subhash Chandra had said, “This restructuring highlights Zee's continued commitment to create value for shareholders and ensure better business practices.”
Zee had acquired a majority stake in ETC Networks in a two-step process for a total consideration of Rs 25 crore.
In the first step, Zee picked up 48.4 per cent equity stake in ETC Networks from its promoters for a consideration of around Rs 18 crore.
It was followed by Zee acquiring an additional 8 per cent stake through a preferential allotment for Rs 7 crore and an open offer to the other shareholders of ETC Networks.
At the time of the acquisition, the day-to-day operations of ETC Networks continued with the existing management team, consisting of three executive directors even as Zee will control the board.
ETC Networks has 2 channels that are free to air. These include ETC and ETC Punjabi. The latter has a strong presence in the northern region and also has exclusive worldwide rights to telecast Gurbani live from the Golden Temple, Amritsar for 11 years.
Over the past few years, the corporate structure of Zee has become multi-layered and complex due to organic and inorganic growth. Also, due to subsequent changes in the regulatory and tax framework, inefficiencies had crept in.
Zee aims to achieve better tax-efficiency and leaner corporate structure by reducing the number of subsidiaries.
The move will facilitate the process of consolidation of financials of Zee Telefilms.