Next MediaWorks Ltd (NML), which runs FM channel Radio One through its subsidiary Next Radio Ltd (NRL), has announced that it will be raising around Rs 115 crore for migration of its existing radio licences from Phase II to Phase III and for participation in the auctions for new licenses.
"This is proposed to be done through a combination of debt of about Rs 80 crores and issue of equity/ convertible preference shares of NRL to Mr. Rakesh Jhunjhunwala and/or his associates for Rs 25 crores ("Investor")," the company said in a filing to the stock exchange on June 18, 2015. The preference shares will be converted to a minority stake holding in the future.
Speaking to exchange4media, Vineet Singh Hukmani, MD and CEO of Radio One explained, “Rakesh Jhunkhunwala has agreed to invest Rs 25 crore in Next Radio Ltd in exchange for preference of shares to be convered to a minority stake holding in the future. He has also provided collateral for us to secure Rs 80 crore of debt on very good terms. This, along with our internal accruals, paves the way for successful raising of growth capital required for migration and auctions. Our shareholders are very happy as Jhunjhunwala and an earlier investor into the business. The strategic fit is therefore just right for us to move into a fruitful future together.”
NRL reported revenue of 65.43 crore for FY 14-15; a growth of 11 per cent over FY13-14. It also said that profit before tax grew 93.3 per cent in the same period.
Radio One is known for its diversified programming, which includes international formats for metros like Mumbai and Delhi, Bollywood for Pune and Bangalore. It is currently present in 7 cities; which include Mumbai, Delhi, Pune, Bangalore, Ahmedabad, Kolkatta and Chennai. The station is looking to renew licenses in these cities and is interested in bidding for frequencies in Hyderabad and Bangalore in the first stage of the Phase III auctions. This would enable the operator to deliver differentiated content to listeners.