Manish Dawar, CFO of Den Networks says, the company sold Star Den distribution to focus on core business of cable and broadband. While Den is already profitable in the cable business, the television and broadband businesses will turn profitable by end of FY17, he adds.
Den is in the midst of final negotiations for stake sale in the soccer business as well, but it is premature to talk about valuations, Dawar says.
He says the company has invested Rs 15 crore in TV shop business with Snapdeal and expects this business to break even some time during the next financial year.
The company plans to consolidate 20-30 cable companies under its business, but has no plans to list the broadband business separately, he says.
On the ongoing court cases to extend the deadline for digitisation, Dawar says, that set top boxes are available in abundance so there is no reason for the extension. However, will await the hearing in this regard in April, he adds.Below is the transcript of Manish Dawar’s interview with Reema Tendulkar and Latha Venkatesh on CNBC-TV18.Reema: Have you sold your entire stake in this particular joint venture? What is the total amount that you have invested in it? Why are you selling it? Are you selling it at a profit?A: I just want to give you a little background of Den so that we understand as to what we are doing on Star Den, make sense with the overall strategy. So, we have got five businesses – we have got cable business where we are shifting from analogue to digital and that sits right in the middle of government agenda of Digital India. We started broadband business about 1.5 years back which again fits in very well with the government agenda of Digital India. Third, we have got soccer business where we own the Delhi Dynamos which is a soccer club for Indian Super League (ISL). We have a joint venture with Snapdeal which is a TV-shop business. It is owned 50-50 percent between the two of us. And we had a distribution joint venture with Star which started in 2011 and then, we kind of virtually started thinning down the operations in 2014 as a result of Telecom Regulatory Authority of India (TRAI) order.If you were to look at all our businesses, we have already announced our intention that we will be focusing on our core businesses. And our core business remains cable and broadband which sits in very well with the government agenda which is where the entire investment is happening, which is where the big consumer shift is also going to take place, so therefore that is what our stated intent is.With that in mind, we have already announced our intention that we will be diluting out of soccer business. We have been in fact talking about this for a while now and we are making good progress there. Again, with that focus, we unbundled the value which was lying in Star Den which was a joint venture for distribution platform with Star TV and in fact, we converted that joint venture with Media Pro in 2011 whereby we were distributing close to 68 channels from Star platform, from Zee platform, from Times Group. And, as a result of TRAI order, we had the broadcasters consolidate the distribution business within themselves. We have unlocked the value now and we are getting out of this joint venture. We invested about Rs 2.5 crore, we are getting about Rs 40 crore, so therefore we will make a profit of about Rs 38 crore on this exit.More to follow...
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