The Foreign Investment Promotion Board (FIPB) has approved the plans of Mauritius-based fund, Cliffrose Investment, to acquire 7.14 per cent stake in Bhaskar Group’s flagship company, Writers & Publishers Ltd (WPL), for over Rs 150 crore. This deal values the company at Rs 2,100.84 crore.
An official communiqué stated that as per the agreement between the two companies, Cliffrose would buy 76,305 fully paid up equity shares in WPL on a preferential basis. The present policy allows foreign direct investment of up to 26 per cent through the FIPB route in news and current affairs publications.
The communiqué further stated, “The I&B ministry, in this case, gave a no objection certificate to the proposal, subject to the condition that foreign holding in the company – either directly or indirectly – did not exceed 7.14 per cent and that Cliffrose Investment is not in the adverse list of the RBI.”
Some other conditions imposed by the government are that all key executives and employees of the company would be Indian nationals and that WPL would take prior permission from the ministry before making any changes in its share holding.
The government has also directed the company to ensure that the Indian shareholding should always be at least 51 per cent of the total equity. The I&B Ministry has also told the company that any violation of existing laws would result in revocation of the no-objection certificate.
WPL is into developing, editing, publishing, printing, distributing and marketing newspapers and other publications. The Hindi news genre, including the print and electronic media, today represents a market of roughly Rs 500 crore and is set to grow even further.