ENIL to sell stake in Times Innovative Media to BCCL for cash consideration of Rs 45 cr
The Board of Directors of Entertainment Network India Ltd (ENIL), at their meeting held on July 8, 2010, have approved in-principle the sale of ENIL’s entire equity stake of 83.44 per cent in Times Innovative Media Ltd (TIM) to Bennett, Coleman & Company Ltd (BCCL) for a cash consideration of Rs 45 crore. Additionally, BCCL will repay ENIL’s loan to TIM and also absorb the obligations under the financial guarantees provided by ENIL on account of TIM as on the date of the proposed transaction. As on July 8, 2010, the loans advanced by ENIL to TIM and the financial guarantee obligations of ENIL on account of TIM stood at Rs 42.50 crore and Rs 31.23 crore, respectively.
The sale is subject to the execution of a satisfactory Sales and Purchase Agreement between ENIL and BCCL. BCCL has reserved the right to effect the purchase either directly or together with its other affiliates or through its other affiliates.
N Subramanian, Group CFO, ENIL, told exchange4media, “The stake sale is positive for ENIL. The total valuation of TIM stands at Rs 1.1 billion. For our 83.44 per cent stake, we get a direct cash Rs 45 crore from BCCL, while the debt of Rs 56 crore of the OOH business will also be borne by BCCL. So, we will get Rs 1.01 billion cash on our books.” Subramanian is looking forward to Phase III of FM expansion. “We are going to keep this Rs 1.01 billion aside for investing in Phase III,” he said.
He further said, “The OOH business is strongly dependent on the contracts that you have. Two-thirds of the revenue of our OOH business is coming from the Delhi and Mumbai airport contracts, of which the Mumbai contract will expire on July 31, 2010. Delhi is now with a joint venture. We don’t know what’s going to happen, and thus, it makes sense for us to focus on our core business.”
In FY10, TIM’s net loss stood at Rs 39 crore on an income of Rs 1.56 billion, while expenses stood at Rs 1.71 billion.
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