Financial Daily from THE HINDU group of publications
Thursday, Mar 30, 2006
Financial Daily from THE HINDU group of publications Thursday, Mar 30, 2006 |
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Radio/TV Corporate - Restructuring Zee Tele to split into 4 cos Our Bureau
Mumbai , March 29 Zee Telefilms Ltd (ZTL) on Wednesday announced board approval for a plan restructuring it into four listed companies. Apart from itself, the other three companies would be news and regional channels, direct-to-home and distribution. The news-related business of ZTL would be hived off and merged into Zee News Ltd (ZNL). The shareholders of ZTL would receive shares of ZNL in proportion. Zee News would be listed independently. Siticable and the cable-related business of ZTL would be demerged into Wire and Wireless (India) Ltd (WWIL), a new company. The shareholders of ZTL would receive proportionate shares of WWIL as consideration.
To streamline operations
The proposal to demerge ZTL's consumer business to DishTV has got in principle approval from the board. "The restructuring of these businesses would result in streamlining operations and better exploitation of opportunities in each area to build long-term shareholder value. It would also clear the ground for acquisitions and strategic or financial partners in the demerged businesses, apart from unlocking shareholder value," said Mr Subhash Chandra, Chairman, ZTL. The move was necessitated on account of the ambiguities in ZTL's existing structure. "Due to regulatory restrictions, the business of Dish TV was structured in a very fractured manner and hence was difficult for ZTL shareholders to understand. The structure was also tax inefficient,'' he said. The company had transferred newsgathering activities of ZTL to Zee News Ltd in October 2005 in compliance with government guidelines. Downlinking and commercial exploitation of news-bearing channels was retained under ZTL.
Bouquet of channels
Now the company has brought all operational activities together to create strategic focus, remove tax inefficiencies and unlock shareholder value in the news business, ZTL said in a statement. Foreign Institutional Investors (FIIs) would be allotted shares in ZNL in compliance with government guidelines. "In case, the allotment works out to more than 26 per cent, FIIs would be allotted preference shares of equivalent value on a proportionate basis,'' the statement said. Shares of ZTL moved down by Rs 3.05 or 1.29 per cent in Wednesday's trade on BSE.
Related Stories: More Stories on : Radio/TV | Restructuring | Zee Telefilms Ltd
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