Zee to buy 51% Asianet stake in Rs 400 cr deal

Zee to buy 51% Asianet stake in Rs 400 cr deal
ENS ECONOMIC BUREAU

MUMBAI, APR 12: Zee Telefilms Limited (ZTL) will pick up a majority stake in the popular Malayalam channel, Asianet Communications Limited (ACL), for approxiamiately Rs 400 crore in a stock deal.

As per a memorandum of understanding signed with ACL, ZTL will acquire 51 per cent stake to be paid in the form of its shares with the management control being vested with Asianet. ``The alliance will give ZTL a head-start in consolidating its entry in the South Indian regional language channels,'' B R Jaju, executive president-finance and global CFO of Zee Network, said in a statement here.

The MoU provides for Asianet's chairman and managing director, Dr Raji Menon, an NRI, representation on the board of directors of ZTL and Zee chairman Subhas Chandra's representation on ACL board. Apart from the existing Malayalam channel, ACL is to launch three more regional channels - Telugu, Kannada and Tamil.

Zee Telefilms' shareholders on Monday approved the company's plans to raise up to $1.5 billion through an American Depositary Receipts (ADR) offering, or issue equity shares up to 40 million, whichever is higher.

The company plans to come out with an ADR issue by June subject to regulatory approvals and market conditions. "We are working out the time frame for the issue. The listing will also depend on the market conditions," Jaju said.

Zee Network chairman Subhash Chandra had informed the shareholders that the company would launch a sports, an educational, and an international channel of traditional Indian interest, like yoga, in the second half of 2000.

Zee will have nine channels in its bouquet by June, and 18 channels by the end of the year. "We will offer a wide choice of content. This will be a prelude to our direct-to-home (DTH) service of the future," Chandra said.

The media company plans to expand its content production, Internet access, e-commerce, Internet portals, and cable network upgradation, including installation of fibre optic network activities.