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New Vernon to buy 25% of Jagran TV

09-May-2005
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New Vernon to buy 25% of Jagran TV

Jagran TV Private Limited, the company that runs the news channel called Channel 7, will offload 25.7 per cent stake in it to the Mauritius-based investor New Vernon Bharat Ltd.

The news broadcaster, which is the broadcasting arm of the Kanpur-based Jagran Prakashan, is expected to raise Rs 30 crore from the deal. This puts the total valuation of Jagran TV, which started its operations only about a month back at Rs 87 crore (pre-transaction value).

It may be recalled that Jagran Prakashan already has an agreement with Independent News & Media Plc of Ireland to dilute a 26 per cent stake in it for Rs 149.24 crore. Jagran Prakashan is the owner of Dainik Jagran, a Hindi newspaper with a readership of more than 16 million from 25 editions in north India.

According to senior government officials, the company has sought the permission of the Foreign Investment Promotion Board (FIPB) for the investment proposal.

As per the present foreign investment norms in news channels, up to 26 per cent foreign direct investment (FDI) is permitted in television news channels up-linking from India.

It may also recalled that the government is considering allowing foreign institutional investors to invest in news up-linking companies.

As per the agreement between the two companies, Jagran TV will issue about 3.45 million shares at a premium of Rs 76.73 each, while the book value of the share is Rs 10 per share and the fair value is just Rs 8.5 per share.

Jagran TV Pvt Ltd was incorporated on April 8, 2004, with a paid-up capital of Rs 10 crore. The company has set up its studio at Noida and has invested Rs 40 crore in fixed assets and all pre-operative expenses. The news broadcaster is also expected to employ about 450 employees.

Jagran TV beams all its programmes from INSAT-II E to all of Southeast Asia and South Asia. This is the same transponder from which Doordarshan and Zee programmes are telecast. The channel also has an agreement with Essel Shyam Communication to use its facilities for uplinking the channel.

Besides, the channel also uses four DSNG vans for receiving live feed from all over the country to be downlinked at the teleport of Essel Shyam Communications.

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