Screwvala buys NewsCorp stake in UTV

Screwvala buys NewsCorp stake in UTV

Author | exchange4media News Service | Tuesday, Jun 22,2004 7:54 AM

Screwvala buys NewsCorp stake in UTV

Ronnie Screwvala has bought out News Corporation’s 15.5 per cent stake (held through Star India) in UTV Software Communications for an undisclosed amount.

The UTV promoter has also picked up another 12.4 per cent from CDPQ, a Canada-based pension fund, which increases his stake in the television software company to 54 per cent.

Following this, UTV will file a prospectus with the Securities and Exchange Board of India in the next three weeks for an initial public offering of 34 per cent stake.

The issue, of about 12 million shares with a face value of Rs 5, including a fresh issue of 6 million shares, is expected between September and November. CDPQ will offload its remaining stake of six million shares in UTV through the public offer.

Screwvala said: “Under the shareholder agreement with NewsCorp, I had an option to buy back their stake pre-IPO, and I have exercised that option to consolidate my holding.”

UTV has several alliances with Star for providing content, distribution, marketing and advertising services to Vijay TV.

The two media houses also share an agreement for co-production of movies and a distribution alliance for UTV’s Hungama channel.

Screwvala said Star’s exit from UTV will not impact the multiple strategic alliance between the two companies. “These two relationships are mutually exclusive,” he said.

After the IPO, UTV’s equity base will increase from 29 million shares to 35 million shares.

Screwvala’s 54 per cent stake will be diluted to around 46 per cent after the IPO due to the fresh issue.

“None of the existing stake holders except CDPQ will offload their stake in the IPO,” Screwvala said.

Financial institutions and foreign institutional investors currently hold around a 25 per cent stake in the company, which will stand reduced to around 20 per cent after the flotation.

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