Moneycontrol Bureau
Reliance Capital, part of Anil Ambani-led Reliance Group, on Wednesday, announced value unlocking in its radio and TV businesses that will help reduce debt by approximately Rs 1,900 crore.
"Reliance Broadcast Network (RBNL), the largest operator of FM channels in India, has signed definitive and binding agreements with Zee Media Corporation (ZMCL) to sell 49 percent stake in its radio broadcast business," the company said in its filing.
Simultaneously, Zee Entertainment Enterprises (ZEEL), a separate entity under Zee Group, will also acquire 100 percent stake in the Reliance Group’s general entertainment TV business.
The transaction pegs the combined enterprise value of radio and TV business at approximately Rs 1,900 crore.
Both these transactions have been approved by the boards of respective companies and are expected to be completed by next year, subject to applicable approvals.
"We are happy to bring in Zee Media as a partner in the radio business and divest 100 percent of general entertainment TV business to Zee Entertainment. This transaction is part of our strategy to reduce exposure in non-core business of media and entertainment and work towards further reducing our debt under Reliance Capital," Sam Ghosh, ED and Group CEO, Reliance Capital said.
Reliance Broadcast Network operates the largest network of FM Radio channels in India under the brand name of 92.7 Big FM that reaches out to 45 cities.
Under this transaction, the company will transfer 45 operational and 14 new channels into two SPVs respectively and Zee Media Corporation will acquire 49 percent stake in each of these two SPVs.
"Both companies shall also have a call / put option for the balance 51 percent stake in both the SPVs after the stipulated lock-in period," Reliance Capital said.
The General Entertainment TV broadcasting business currently comprises of two channels - Big Magic (comedy channel) and Big Ganga (Bhojpuri entertainment channel).
The company said both these channels would be merged into Zee Entertainment as part of this transaction.
At 15:03 hours IST, the scrip of Reliance Capital was quoting at Rs 442.10, up 5.30 percent while Zee Entertainment Enterprises was at Rs 455.75, up 1.39 percent and Zee Media jumped 11.92 percent to Rs 34.75 on the BSE.
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