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Pioneer to offload 30 pc stake to fund its Rs 40-crore expansion plan

Pioneer to offload 30 pc stake to fund its Rs 40-crore expansion plan

Author | Sumita Patra | Monday, Aug 07,2006 8:24 AM

Pioneer to offload 30 pc stake to fund its Rs 40-crore expansion plan

Pioneer has lined up a Rs 40-crore expansion plan and is looking at funding this expansion by offloading 30 per cent of its equity. The paper is in talks with two venture capitalists and two private business groups which have plans to enter media.

The names of the potential investors with whom the paper is in talks could not be ascertained despite repeated attempts. Chandan Mitra, Managing Director and Editor, Pioneer, said, “The group has posted modest profits for the last three financial years in a row. We felt that with this balance sheet we should look for investors. So, we decided to divest a portion of our stake and bring in more money for our expansion.”

The paper has hired Mumbai-based merchant banker Puneet Advisory Services, headed by Dushyant Dave, to evaluate the offers. Pioneer is looking at raising Rs 25 crore through equity and Rs 15 crore through loans to meet its Rs 40 crore-expansion plan.

Mitra made it clear that the editorial control would remain with him. He said, “I have no interest to dilute the editorial control of the paper. I do not want any of the investors to demand a say in the editorial decision of the paper.”

It may be noted here that Pioneer’s talks with Hindi daily Dainik Jagran recently failed. Jagran had wanted to acquire a majority stake in the Pioneer, which the latter refused to part with and the talks ended in a stalemate.

On the possible changes one could expect with a new partner coming on board, Mitra said, “With growing competition we definitely feel that we need to upgrade our product in terms of adding more pages, more sections and more editions. We need to put in place better equipment, hire more journalists and designers. We will also concentrate on advertising and come up with circulation schemes.”

As part of its expansion plans, the group is planning to set up two printing presses in Delhi, one for the newspaper and one for its magazine division. The paper will launch its leisure and lifestyle magazine, ‘Exotica’, by September 2006.

To be available free of cost, the content of ‘Exotica’ would be skewed towards wellness and health related issues and travel and food. The magazine will be placed in five star hotels such as Intercontinental and Hyatt. The group is in talks with other hotel chains, too, for the same. The initial print run is close to 30,000, which may go up as and when more tie-ups with hotels take place.

Pioneer is also planning to launch more editions. After a Chandigarh edition, which will be launched by August-end, Pioneer is looking at launching its editions in Hyderabad and Ahmedabad, which according to Mitra, would happen in the next one year.

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