Sun TV Network Ltd has informed Bombay Stock Exchange (BSE) that the company, through its subsidiary, South Asia FM Ltd (SAFL), has entered into a strategic alliance with Red FM to further its FM radio broadcasting business in the North, West and East Indian markets. As part of the transaction, SAFL has taken up a 48.9 per cent beneficial interest in Red FM by acquiring equity of the holding companies of Red FM at par.
The promoters of Red FM would continue to hold 51.1 per cent in Red FM. In lieu of this, the promoters of Red FM -- Usha Reddy and Arjun Rao, alongwith NDTV, have, through their investment company A. H. Multisoft and NDTV News respectively, subscribed to 35 per cent of the enlarged equity of SAFL. The balance equity of SAFL continues to be held by its existing shareholders.
SAFL owns 23 FM radio licences all over India (except the Southern states of Tamil Nadu, Karnataka, Andhra Pradesh and Kerala). It currently has two operational radio stations at Jaipur and Bhubaneshwar.
Red FM, one of the fastest growing FM radio companies in India, operates three radio stations in Mumbai, Delhi and Kolkata. It is the No. 2 player in two of the largest FM radio markets in India, viz., Mumbai and Delhi. This alliance would enable the company to boost its presence in the fast-growing Indian radio market.
Enam Securities Pvt. Ltd. acted as Sole Advisor to the company for this transaction.