Worldwide Channel Investments Ltd is picking up a 50 per cent stake in Worldwide Media Ltd (WWML), a fully owned subsidiary of Bennett, Coleman & Co, the publisher of Times of India and The Economic Times newspapers, for Rs 38.95 crore.
As per the investment proposal, which has been cleared by the government today, WWML will issue fresh shares up to 50 per cent of its equity shares to Worldwide Channel Investments at a premium.
Worldwide Channel Investments is a fully owned company of BBC Worldwide, a fully owned subsidiary of British Broadcasting Corporation.
BBC Worldwide is engaged in non-news media related business in the UK and other countries, including publishing of books, journals, scientific, specialty and technical magazines.
Besides, Worldwide Channel Investments will also have an option to up its investment in WWML, the publishers of Femina and Filimfare magazines by another 24 per cent at a subsequent stage from Bennett, Coleman & Co.
As per the agreement between the two companies, Bennett, Coleman & CO will provide a loan of Rs 15.5 crore to WWML, which will be repayable by 2006 or 2008.
Besides, Worldwide Channel has also agreed to provide a loan of Rs 21.1 crore to WWML, which may be converted into 10, 000 preference share at a premium to the BBC Worldwide arm.
Besides, all future funding to be provided by Bennett, Coleman & Co and Worldwide Channel to WWML will be on a pro rata basis to the equity share held by the two companies in the venture.