To raise Rs 100cr for print, radio biz: Mid-Day

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To raise Rs 100cr for print, radio biz: Mid-Day

Manajit Goshal, CFO, Midday Multimedia and MD, Midday Infomedia said the company was looking at raising a total of Rs 100 crore. “Rs 50 crore will be raised for the print business and the remaining for radio.” The company was looking at preference share allotment for print, he said. However, adding, for radio, “We are exploring options.”

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Next Mediaworks See previous management interviews See what other Experts & Brokerages are saying about Next Mediaworks Next Mediaworks BSE | NSE 25/05/12 Are Mutual Funds betting on Next Mediaworks?

Manajit Goshal, Chief Financial Officer, Mid-Day Multimedia and Managing Director, Mid-Day Infomedia, said the company was looking at raising a total of Rs 100 crore. "Rs 50 crore will be raised for the print business and the remaining for radio."

According to him, the company was looking at preference share allotment for print. 

Here is a verbatim transcript of the exclusive interview with Manajit Goshal on CNBC-TV18. Also watch the accompanying video.

Q: How much capital are you raising? Some talk in the market is it could be anywhere between Rs 100-200 crore either to pay off debt perhaps for more expansion, is that correct?

A: We are planning to raise something around USD 10 million to start with. Of course there will be a separate round of investment in our radio business. For the print business right now we are looking at USD 10 million.

Q: For the group as a whole how much do you think this adds up to. There was also talk in the market that perhaps Mid-Day may divest its radio business. Could you confirm or deny that and if you are going to keep it how much money would you require in the next 12 months both on the radio side and the print and publishing side?

A: The point is that we did invest in the business knowing fully well that there will be a gestation period and we knew that there will be some time before it turns around. We are looking at raising somewhere around Rs 100 crore; Rs 50 crore for the print and Rs 50 crore for the radio business. Hopefully print will be profitable this year itself and radio should turnaround next year.

Q: What do you expect will be the margins in the print business itself? You have seen a decrease in raw material prices, how have ad rates in subscription been? What kind of an FY10 are you looking at?

A: We are pretty hopeful that newsprint prices will not go up to those historic highs of USD 950 anytime soon. Other raw material prices are also down, salaries are down. The advertisement market is improving gradually. Subscription prices are critical. In fact we have been at the forefront telling the media barons that we need to increase subscription prices. In India, newspapers are one of the cheapest in the world and we don't even cover our cost. I think we are about to see a regulation in terms of readers actually paying for what they want to read and that would be good for industry as a whole.

Q: Are you affecting a price rise?

A: Yes we are and hopefully the whole industry soon will.

Q: Do you have some numbers on how much the dilution could be to raise this 50-50 crore and what could be the instrument - would you look at global depository receipt (GDR) or a qualified institutional placement (QIP). What kind of instrument would you use?

A: We are looking at preferential allotment to start with in the print business. In the radio business we are still in talks; we will explore, we are also waiting for the third round of licensing to happen, once that happen hopefully the foreign direct investment (FDI) limit will be increased, so somewhere between 26-49%. Once that happens, then we can explore the international market for radio funding. For the print funding we are looking at Indian funds.